A$1$ Repair Service uses the straight$-$line method of depreciation. The company's fiscal year$-$end is December $31.$ The following transactions and events occurred during the first three years.

$2025$ July $1$ Purchased equipment from the Acme Equipment Center for $\backslash (\backslash$$ $5,500\backslash )$ cash plus sales tax of $\backslash (\backslash$$ $305\backslash ),$ and shipping costs of $\backslash (\backslash$$ $250\backslash ).$

Nov. $3$ Paid for ordinary repairs on the equipment at a cost of $\backslash (\backslash$$ $240\backslash ).$

Dec. $31$ Recorded $2024$ depreciation on the basis of a four$-$year life and estimated salvage value of $\backslash (\backslash$$ $455\backslash ).$

$2026$ Dec. $31$ Recorded $2026$ depreciation.

$2027$ Jan. $1$ Paid $\backslash (\backslash$$ $1,800\backslash )$ for a major upgrade of the equipment. This expenditure is expected to increase the operating efficiency and capacity of the equipment.

Instructions

Prepare the necessary entries. $($Show computations.$)$