Financial Accounting Ex6: On January 18, 2010 a company purchased a cooling system for $450,000. The
system had an estimated useful life of 5 year and no salvage value. On January 13, 2013
the company completed an improvement of the system and paid cash $60,000, and
now expects the system to be more efficient and last 3 year beyond the original
estimate, the accumulated depreciation before repairs was a $270,000. The company
uses the straight-line method of depreciation.
Required:
1. Prepare the journal entry at January 1, 2013 to record the improvement of the
cooling system
2. Prepare the journal entry at December 31, 2013 record the depreciation expense.