At the beginning of the year, Young Company bought three used machines from Vince, Inc. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts. Machine A Machine B. Machine C Amount paid for asset $7,600 $25,600 $9,300 Installation costs 200 600 500 Renovation costs prior to use 1,500 1,200 1,000 Repairs after production began 400 350 325 By the end of the first year, each machine had been operating 7,000 hours. Required: 1. Compute the cost of each machine. Explain the rationale for capitalizing or expensing the various costs. 2. Give the journal entry to record depreciation expense at the end of year 1, assuming the following: Machine Estimates Life Residual Value $ 600 Depreciation Method Straight-line 5 years 10.000 1000