On 2 January 2019, McGrath Ltd purchased a machine for $36 000 with a useful life of 5 years and a residual value of $6000. In order to keep the machine running properly, the company has performed regular maintenance and repairs each year since its acquisition. In the fourth year (2022), ordinary repairs amounted to $900.

On 3 January 2023, McGrath Ltd decided to completely overhaul the machine’s major operating parts at a cost of $9600, after which the machine is expected to have a useful life of 4 more years and a revised residual value of $4000. McGrath Ltd uses the straight‐line depreciation method. The carrying amount of the parts replaced was considered to be $400. Ignore GST.

Required

Prepare general journal entries to record:

i. the purchase of the machine on 2 January 2019 

ii. the day‐to‐day repairs on the machine in 2022 

iii. the overhaul of the machine on 3 January 2023 

iv. depreciation expense on the machine on 31 December 2023.