Problem - On May 1, 2014, the XYZ Company purchased equipment to be used in its manufacturing process.
The equipment cost $60,000, has a six-year useful life and no residual value.
The company uses the straight-line depreciation method for all manufacturing equipment.
On January 4, 2016, $15,000 was spent to repair the equipment and to add a feature that increased its operating efficiency.
Of the total expenditure, $4,000 represented ordinary repairs and annual maintenance and $11,000 represented the cost of the new feature.
In addition to increasing operating efficiency, the total useful life of the equipment was extended to eight years.
Show a corresponding journal entry for each for the following...
1) Depreciation for 2014 and 2015
2) The 2016 expenditure
3) Depreciation for 2016