Depreciation    LO5 Hawk Ltd started operations on 1 September 2014. Hawk Ltd’s accounts at 31 December 2017 included the following balances. Machinery (at cost) $ 91 000 Accumulated depreciation — machinery 48 200 Vehicles (at cost; purchased 21 November 2016) 46 800 Accumulated depreciation — vehicles 19 656 Land (at cost; purchased 25 October 2014) 81 000 Building (at cost; purchased 25 October 2014) 185 720 Accumulated depreciation — building 28 614 Details of machines owned at 31 December 2017 are as follows. Machine Purchase date Cost Useful life Residual value 1 7 October 2014 $43 000 5 years $2 500 2 4 February 2015 $48 000 6 years $3 000 Additional information • Hawk Ltd calculates depreciation to the nearest month and balances the records at month‐end. Recorded amounts are rounded to the nearest dollar, and the end of the reporting period is 31 December. • Hawk Ltd uses straight‐line depreciation for all depreciable assets except vehicles, which are depreciated on the diminishing balance at 40% p.a. • The vehicles account balance reflects the total paid for two identical delivery vehicles, each of which cost $23 400. • On acquiring the land and building, Hawk Ltd estimated the building’s useful life and residual value at 20 years and $5000 respectively. Required Prepare general journal entries to record the following transactions that occurred from 1 January 2018. 2018 Jan. 3 Bought a new machine (Machine 3) for a cash price of $57 000. Freight charges of $442 and installation costs of $1758 were paid in cash. The useful life and residual value were estimated at 5 years and $4000 respectively. June 22 Bought a second‐hand vehicle for $15 200 cash. Repainting costs of $655 and four new tyres costing $345 were paid for in cash. Aug. 28 Exchanged Machine 1 for office furniture that had a fair value of $12 500 at the date of exchange. The fair value of Machine 1 at the date of exchange was $11 500. The office furniture originally cost $36 000 and, to the date of exchange, had been depreciated by $24 100 in the previous owner’s books. Hawk Ltd estimated the office furniture’s useful life and residual value at 8 years and $540 respectively. Dec. 31 Recorded depreciation. 2019 April 30 Paid for repairs and maintenance on the machinery at a cash cost of $928. May 25 Sold one of the vehicles bought on 21 November 2016 for $6600 cash. June 26 Installed a fence around the property at a cash cost of $5500. The fence has an estimated useful life of 10 years and zero residual value. (Debit the cost to a land improvements asset account.) Dec. 31 Recorded depreciation. 2017 Jan. 5 Overhauled Machine 2 at a cash cost of $12 000, after which Hawk Ltd estimated its remaining useful life at 1 additional year and revised its residual value to $5000. June 20 Traded in the remaining vehicle bought on 21 November 2016 for a new vehicle. A trade-in allowance of $3700 was received and $22 000 was paid in cash. Stamp duty of $500 and registration and third-party insurance of $800 were also paid for in cash. Oct. 4 Scrapped the vehicle bought on 22 June 2018, as it had been so badly damaged in a traffic accident that it was not worthwhile repairing it. Dec. 31 Recorded depreciation.