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On 1 October 2018 Starring Co acquired a machine under the following terms. Cost 80,000 Trade discount (applying to cost only) 10% Freight charges

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On 1 October 2018 Starring Co acquired a machine under the following terms. Cost 80,000 Trade discount (applying to cost only) 10% Freight charges 5,000 Electrical installation cost 2,000 Staff training in use of machine 6,000 Pre-production testing 3,000 Purchase of a three-year maintenance contract 8,000 Every five years the machine will need a major overhaul in order to keep running. How should this be accounted for?

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