Acc2206

Swift Corporation is an international provider of freight services that follows IFRS. Its fleet of vehicles includes a truck that is carried in its books as "VC1-016." This truck was purchased January 1, 2016 for $250,000 and has been depreciated on a diminishing balance basis. The residual value is zero. By December 31, 2017, its book value (carrying value) is $90,000. On January 1, 2018, after the driver had reported problems with the truck's engine, a decision was made to do a complete overhaul. The overhaul was completed on January 7, 2018 for $32,000 cash. It is estimated that the overhaul has extended the life of this truck from the original 5 years to a total of 8 years. Required: Prepare the journal entries for 2018 relating to the truck's overhaul and the depreciation expense that would be recorded at December 31, 2018. 7 A B I SS