On January $1,$ Quick Stop, a convenience store, purchased a new soft$-$drink cooler. Quick Stop paid $$23,000$ cash for the cooler. Quick Stop also paid $$730$ to have the cooler shipped to its location. After the new cooler arrived, Quick Stop paid $$2,410$ to have the old cooler dismantled and removed. Quick Stop also paid $$820$ to a contractor to have new wiring and drains installed for the new cooler. Quick Stop estimated that the cooler would have a useful life of $6$ years and a residual value of $$230.$ Quick Stop uses the straight$-$line method of depreciation.

Question Content Area

$1.$Prepare any necessary journal entries to record the cost of the cooler. If an amount box does not require an entry, leave it blank.

Jan. $1$

Accounts PayableAccumulated DepreciationCashDepreciation ExpenseEquipment

Accounts PayableAccumulated DepreciationCashDepreciation ExpenseEquipment

Question Content Area

$2.$Prepare the adjusting entry at the end of the year to record depreciation expense on the new cooler. If an amount box does not require an entry, leave it blank.

Dec. $31$

Accounts PayableAccumulated DepreciationCashDepreciation ExpenseEquipment

Accounts PayableAccumulated DepreciationCashDepreciation ExpenseEquipment

Question Content Area

$3.$ What is the book value of the cooler after the adjusting entry is made?

fill in the blank $1$ of $1$$

$4.$Conceptual Connection: If Quick Stop had used a useful life of $10$ years and a residual value of $$1,500,$ how would this effect depreciation expense and the book value of the cooler at the end of the year?

Line Item DescriptionAmountDepreciation expensefill in the blank $1$ of $2$$Book value of the cooler at the end of the year