Journal entries in relation to plant asset transactions.
Mahoney Company had the following transactions involving plant assets during 2007 and 2008. Unless otherwise indicated, all transactions were for cash.
2007
Jan. 2 Purchased a truck for $50,000. Sales tax on the truck was $3,000, and the license was $250. The truck is expected to have a $4,000 salvage value and a 4 year life.
Jan. 3 Paid $1,500 to have the company's logo painted on the truck. This did not change the truck's salvage value.
Dec. 31 Recorded straight-line depreciation on the truck.
2008
Jan. 5 Paid $5,000 to put a bigger engine in the truck. This new engine is expected to make the truck run more efficiently, and will increase the truck's useful life by one year. The salvage value remained at $4,000.
Mar. 1 Paid $2,000 to replace a broken tailgate. The tailgate was damaged when a heavy carton was inadvertently dropped on it.
Dec. 31 Recorded straight-line depreciation on the truck.
Prepare the general journal entries to record these transactions.