McClain Company incurred the following expenditures during 2016:

Apr.	9	The air conditioning system in the old manufacturing facility was replaced for $86,000. The old air conditioning system had a cost of $72,500 and a book value of $3,000. The old air conditioning system had no scrap value.
June	29	Annual maintenance of $35,500 was performed.
Sept.	12	The roof of the old manufacturing facility is replaced at a cost of $62,500. This expenditure substantially extended the life of the facility.
Dec.	28	A new wing was added to the manufacturing facility at a cost of $252,000. This expenditure substantially increased the productive capacity of the plant.

Required:

1.

Prepare journal entries to record McClains expenditures for 2016.

2.

Next Level What is the effect on the financial statements if management had improperly accounted for the:

a.	addition of the new wing to the manufacturing facility
b.	annual maintenance expenditures

General Journal Shaded cells have feedback. PAGE 10 GENERAL JOURNAL Score: 91/137 ACCOUNT TITLE POST. REF. :RI.MI. Apr.9 Air Conditioning System Accumulated Depreciation Loss on Disposal of Property, Plant, and Equipment Air Conditioning System Cash Jun. 29 Repair and Maintenance Expense Cash Sep. 12 Accumulated Depreciation Cash 10 Dec. 28 Building Cash