3. A city government adds street lights within its boundaries at a total cost of $176,000. The lights should burn for at least 8 years but can last significantly longer if maintained properly. The city sets up a system to monitor these lights with the goal that 97 percent will be working at any one time. During the year, the city spends $55,800 to clean and repair the lights so that they are working according to the specified conditions. However, it spends another $85,000 to construct lights for several new streets in the city.

a. Prepare the entries assuming infrastructure assets are capitalized with depreciation recorded.

(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry; 1: Record street lights added

2. Record depreciation expense

3. Record cost of cleaning and repairing street lights.

4. Record additional amount spent to add more lights.

b. Prepare the entries assuming infrastructure assets capitalized with government using the modified approach.

(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry; 1: Record street lights added.

2: Record cost of cleaning and repairing street lights.

3: Record additional amount spent to add more lights.