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Journal entries to record depreciation
Gandiaga owns a truck that it purchased 2 years ago at a total of $29,250. At that time it was estimated that the company would use the truck for 6 years, and then sell it for 1,850. Recently, Gandiaga modified the truck at a cost of $4,500. This modification did not extend the life of the truck, nor did it change the estimated salvage value. Prepare the journal entries to record the cost of the upgrade and the depreciation expense for the 3rd year assuming that Gandiaga uses straight-line depreciation.
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