E9-5 (Algo) Determining Financial Statement Effects of Straight-Line Depreciation and Repairs [LO 9-2, LO 9-3] Wiater Company operates a small manufacturing facility. On January 1, 2021, an asset account for the company showed the following balances: Equipment Accumulated Depreciation (beginning of the year). $ 230,000 108,000 During the first week of January 2021, the following cash expenditures were incurred for repairs and maintenance: Routine maintenance and repairs on the equipment Major overhaul of the equipment that improved efficiency $2,250 28,000 The equipment is being depreciated on a straight-line basis over an estimated life of 20 years with a $14.000 estimated residual value. The annual accounting period ends on December 31. Required: 1. Prepare the adjusting journal entry that would have been made at the end of 2020 for depreciation on the manufacturing equipment. 2. Starting at the beginning of 2021, what is the remaining estimated life? 3. Prepare the journal entries to record the two expenditures for repairs and maintenance during 2021. View transaction list Journal entry worksheet < A Record the adjusting entry for depreciation expense at year-end 2020. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal Required 1 Required 2 Required 3 Starting at the beginning of 2021, what is the remaining estimated life? Remaining Estimated Life years < Required 1 Required 3 > View transaction list Journal entry worksheet A B Record the expenditure for ordinary repairs incurred. Note: Enter debits before credits. Transaction General journal Debit Credit Record entry Clear entry View general journal View transaction list Journal entry worksheet < A R Record the expenditure for extraordinary repairs incurred. Note: Enter debits before credits. Transaction 2 General journal Debit Credit Record entry Clear entry View general journal