Exercise 8-14 Ordinary repairs, extraordinary repairs, and betterments LO C3

Oki Company pays $315,900 for equipment expected to last four years and have a $30,000 salvage value. Prepare journal entries to record the following costs related to the equipment.

1. During the second year of the equipments life, $12,650 cash is paid for a new component expected to increase the equipments productivity by 10% a year.
2. During the third year, $3,163 cash is paid for normal repairs necessary to keep the equipment in good working order.
3. During the fourth year, $5,600 is paid for repairs expected to increase the useful life of the equipment from four to five years.