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Jacobs Company owned a warehouse that had an expected remaining life of 30 years and a book value of $360,000 on January 1, 2008. The company added a sprinkler system to its warehouse to provide fire prevention. The sprinkler system cost $34,000 to install on January 8, 2008. The salvage value of the warehouse was $19,000. The sprinkler system did not change the salvage value or the estimated life of the warehouse.
a. Record the cost of the new sprinkler system on January 8, 2008.
b. Record the annual depreciation expense adjusting entry for the warehouse on December 31, 2008, under the straight-line method.
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