Travel Company owned a service truck that was purchased at the beginning of 2013 for $28,000. It had an estimated life of three years and an estimated salvage value of $4,000. Travel Company uses straight line depreciation. Its financial condition as of January 1, 2015, is shown in the following financial statements model:
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In 2015, Travel Company spent the following amounts on the truck:
Jan. 4 Overhauled the engine for $5,500. The estimated life was extended one additional year, and the salvage value was revised to $2,500.
July 6 Obtained oil change and transmission service, $180.
Aug. 7 Replaced the fan belt and battery, $290.
Dec. 31 Purchased gasoline for the year, $6,200.
31 Recognized 2015 depreciation expense.
Required :
a. Record the 2015 transactions in a statements model like the preceding one.
b. Prepare journal entries for the 2015 transactions.