Mercury Delivery Service completed the following transactions involving equipment. Required Prepare journal entries to record these transactions
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Mercury Delivery Service completed the following transactions involving equipment.
Required
Prepare journal entries to record these transactions and events.
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Year 1 Jan. 1 3 Paid $25,860 cash plus $1,810 in sales tax for a new delivery van that was estimated to have a five-year life and a $3,670 salvage value. Van costs are recorded in the Equipment account. Jan. 1 Paid $1,850 to install sorting racks in the van for more accurate and quicker delivery of packages. This increases the estimated salvage value of the van by another $230. Recorded annual straight-line depreciation on the van. Dec. 31 Year 2 Paid $2,064 to overhaul the van's engine, which increased the van's useful life by two years. May 10 Paid $800 for minor repairs to the van after the driver backed it into a loading dock. Dec. 31 Recorded annual straight-line depreciation on the van.
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