Foley Word Processing Service uses the straight-line method of depreciation. The company's fiscal year end is December 31. The following transactions and events occurred during the first three years.

2013 July 1 Purchased a computer from the Computer Center for $1,900 cash plus sales tax of $150, and shipping costs of $50.

Nov. 3 Incurred ordinary repairs on computer of $140.

Dec. 31 Recorded 2013 depreciation on the basis of a four year life and estimated salvage value of $500.

2014 Dec. 31 Recorded 2013 depreciation.

2015 Jan. 1 Paid $300 for an upgrade of the computer. This expenditure is expected to increase the operating efficiency and capacity of the computer.

Instructions

Prepare the necessary entries. (8 marks)