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A truck was acquired on July 1, 2009 at a cost of $216,000. The truck had a 6-year useful life and an estimated salvage value of $24,000. The straight-line method of depreciation was used. On January 1, 2012, the truck was overhauled at a cost of $20,000, which extended the useful life of the truck for an additional 2 years beyond that originally estimated (salvage value is still estimated at $24,000). In computing depreciation for annual adjustment purposes, expense is calculated for each month the asset is owned.
Instructions:
Prepare the appropriate entries for January 1, 2012 and December 31, 2012.
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