QUESTION TWO

Peter purchased a tractor for R350 000 on 1 September 2019. He estimated the residual value at R120 000 and depreciate it at 15% per year using the diminishing balance method. Peter purchased equipment for R240 000 on 1 June 2020. He decided to sell it for R135 000 on 31 December 2021 and replace it with new equipment of R285 000 on the same day. Peter depreciates his equipment over a period of four years. All his equipment was bought cash.

Required:

2.3 Record all the entries relating to the equipment in the general journals of Peters financial records until 31 March 2022. (20)