Reference no: EM132882621

Question - On January 1, 2018, Birdie purchased a used piece of equipment for $65,000. The next day, it was repaired at a cost of $2,000 and mounted on a new platform that cost $2,400. It was estimated that the equipment would be used for four years and would then have a $9,000 residual value. Depreciation was to be charged on a straight-line basis to the nearest whole month. A full year's depreciation was charged on December 31, 2018, through December 31, 2019, and on April 1, 2020 the equipment was retired from service.

REQUIRED -

A) Make the journal entries to record the purchase of the equipment, the cost of repairing it, and the installation. Assume that cash was paid.

B) Make entries to record depreciation on the equipment on December 31, 2018 and on April 1, 2020.

C) Make entries to record the retirement of the equipment under each of the following unrelated assumptions:

a) It was sold for $15,000.

b) It was sold for $50,000.