Powerhouse Ltd purchased machinery on 2 January 2015, at a cost of $800 000 plus GST. The machinery is depreciated using the straight-line method over a useful life of 8 years with a residual value of $80000.

On 3 January 2018, an overhaul of the machinery was made at a cost of $112 000 plus GST. Because of this overhaul, the useful life was re-estimated at 4 years from 3 January 2018, and the residual value was amended to $40 000. The carrying amount of parts replaced was considered to be $10000.

Required

Assuming the financial year ends on 31 December, prepare journal entries to record:

1. The purchase of the machinery on 2 January 2015

2. Depreciation expense for 2015, 2016 and 2017

3. The overhaul expenditure on 3 January 2018

4. Depreciation expense for 2018.