Answer the question. Description Information Purchase Date January 1, 2020 Original capitalized cost $2,000,000 Original useful life
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Question:
| Description | Information |
|---|---|
| Purchase Date | January 1, 2020 |
| Original capitalized cost | $2,000,000 |
| Original useful life | 5 years |
| Original residual value | $100,000 |
On January 1, 2023, Gurgen made $300,000 worth of extraordinary repairs on this equipment. It financed these repairs by taking out a two-year, 12% note.
These repairs are expected to extend the useful life of the equipment by an additional five years past its original five-year life (to a new total life of 10 years). The company expects the new residual value to be $150,000.
Gurgen uses the straight-line depreciation method for all its depreciable assets.
What would the journal entry on 1/1/23 for the cost of the extraordinary repair, look like?
How much depreciation expense should be recorded on the equipment for the year ending 12/31/2023? Round to the nearest whole dollar.
| Date | Account Name | Debit | Credit |
|---|---|---|---|
| 1/1/2023 | |||
Expert Answer:
The journal entry on January 1 2023 for the cost of the extraordinary repair would look like this Da... View the full answer
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