The following transactions, adjusting entries, and closing entries were completed by Legacy Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used.
2012 Jan. 4. Purchased a used delivery truck for $28,000, paying cash.
Nov. 2. Paid garage $675 for miscellaneous repairs to the truck.
Dec. 31. Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, with a residual value of $5,000 for the truck.
2013 Jan. 6. Purchased a new truck for $48,000, paying cash.
Apr. 1. Sold the used truck for $15,000. (Record depreciation to date in 2013 for the truck.) June 11. Paid garage $450 for miscellaneous repairs to the truck.
Dec. 31. Record depreciation for the new truck. It has an estimated residual value of $9,000 and an estimated life of five years.
2014 July 1. Purchased a new truck for $54,000, paying cash.
Oct. 2. Sold the truck purchased January 6, 2013, for $16,750. (Record depreciation to date for 2014 for the truck.)
Dec. 31. Recorded depreciation on the remaining truck. It has an estimated residual value of $12,000 and an estimated useful life of eight years.
Journalize the transactions and the adjusting entries.