Journal entries to record these transactions and adjustments

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Reference no: EM131217518

Journal Entries for Plant Assets - Stellar Delivery Service had the following transactions related to its delivery truck:

Year 1

Mar. 1 Purchased for $32,500 cash a new delivery truck with an estimated useful life of five years and a $6,850 salvage value

2 Paid $600 for painting the company name and log on the truck

Dec 31 Recorded depreciation on the truck for the year.

Year 2

July 1 Installed air conditioning in the truck at a cost of $1,808 cash. Although the truck's estimated useful life was unaffected, its estimated salvage value was increased by $400.

Sept 7 Paid $450 for truck tune-up and safety inspection

Dec 31 Recorded depreciation on the truck for the year

Year 3

Sept 3 Installed a set of front nd rear bumper guards at a cost of $145 cash.

Dec 31 Recorded depriciation on the truck for the year

Year 4

Dec 31 Recorded depreciation on the truck for the year

Stellar's depreciation policies include (1) using straight-line depreciation, (2) recording depreciation to the nearest whole month, and (3) expensing all truck expenditures of $150 or less.

Required

Prepare journal entries to record these transactions and adjustments.

Reference no: EM131217518

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