Assume that Rees Warehousing completed the following transactions:
2016
Mar. 3 Paid $8,000 cash for a used forklift.
5 Paid $1,500 to have the forklift engine overhauled.
7 Paid $1,000 to have the forklift modified for specialized moving of large flat screen televisions.
Nov. 3 Paid $550 for an oil change and regular maintenance.
Dec. 31 Used the DDB method to record amortization on the forklift. (Assume a three-year life and no residual value.)
2017
Feb. 13 Replaced the forklift's broken fork for $400 cash, the deductible on Rees Warehousing's insurance. The new fork will not increase the useful life of the forklift.
Jul. 10 Traded in the forklift for a new forklift costing $18,000. The dealer granted a $3,000 allowance on the old forklift, and Rees Warehousing paid the balance in cash. Recorded 2017 amortization for the year to date and then recorded the exchange of forklifts. This transaction has commercial substance.
Dec. 31 Used the DDB method to record amortization on the new forklift. (Assume a five-year life and no residual value.)
Rees Warehousing's amortization policy indicates that the company will take a full month's amortization on purchases occurring up to and on the 15th day of the month and will not take any amortization for the month if the transaction occurs after the 15th day of the month.
Required
Record the transactions in the general journal, indicating whether each transaction amount should be capitalized as an asset or expensed. Round all calculations to the nearest dollar.