Problem II: (17 points) Beatty Corp has the following information available related to the equipment it uses in its business: Purchase Date January 1, 2019 Original capitalized cost $700,000 Original useful life 6 years Original residual value $40,000 On January 1, 2021, Beatty made $90,000 worth of extraordinary repairs on this equipment. It financed these repairs by taking out a two-year, 12% note. These repairs are expected to extend the useful life of the equipment by an additional three (3) years past its original six (6) year life (to a new total life of 9 years). There is no change expected to the asset's residual value. Beatty uses the straight-line depreciation method for all its depreciable assets. A: Record the journal entry Beatty should make on 1/1/21 when it incurred the cost of the extraordinary repair. (9 pts) Debit Credit Date 1/1/2021 (Continued on the next page) 2 B: How much depreciation expense should be recorded on the equipment for the year ending 12/31/21? Round to the nearest whole dollar. (8 pts) Answer: $ Space for calculations