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Kelso 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
Kelso 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. Jul 1 Purchased a new computer system from the Computer Centre for $37,000 cash and shipping costs of $250. Nov 3 Incurred ordinary repairs on computer of $3, 280. Dec 31 Recorded 2016 depreciation on the basis of an estimated five-year life and residual value of $1, 250. Dec 31 Recorded 2017 depreciation. Jan 1 Paid $9, 800 for a major upgrade of the computer. This expenditure is expected to increase the operating efficiency and capacity of the computer. Required: Prepare the necessary entries. (Show calculations.)
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