E8-7 (Algo) Recording Depreciation and Repairs (Straight-Line Depreciation) LO8-2, 8-3

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Hulme Company operates a small manufacturing facility as a supplement to its regular service activities. At the beginning of the current year, an asset account for the company showed the following balances:

Manufacturing equipment	$ 114,800
Accumulated depreciation through the end of last year	50,400

During the current year, the following expenditures were incurred for the equipment:

Major overhaul of the equipment on January 2 the current year that improved efficiency	$ 10,000
Routine repairs on the equipment	1,300

The equipment is being depreciated on a straight-line basis over an estimated life of 16 years with a $14,000 estimated residual value. The annual accounting period ends on December 31.

E8-7 Part 3

Required:

3. Prepare the journal entries to record the two expenditures during current year.

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