Question - Hulme Company operates a small manufacturing facility as a supplement to its regular service activities. At the beginning of 2017, an asset account for the company showed the following balances:
Manufacturing equipment - $120,000
Accumulated depreciation through 2016 - 57,600
During 2017, the following expenditures were incurred for the equipment:
Routine maintenance and repairs on the equipment - $1,000
Major overhaul of the equipment that improved efficiency on January 2, 2017 - 13,000
The equipment is being depreciated on a straight-line basis over an estimated life of 15 years with a $12,000 estimated residual value. The annual accounting period ends on December 31.
Required - Prepare the journal entries to record the two expenditures during 2017?