Give the entries to record the replacement

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Question - At the beginning of 2018, Imaculada Company purchased a machine costing P1,000,000. The machine is expected to be useful for a total of 10 years, at the end of which, it is expected to be scrapped. On July 1, 2023, the company replaced the engine block of the machine at a cost of P320,000. This replacement is expected to reduce the operating cost of the machine during its extended useful life of 10 years from the date of replacement.

Required - Give the entries to record the replacement and the year-end depreciation, assuming:

a. The old part had a cost of P250,000.

b. The cost of old part is not reliably determinable, and that the new engine block was very much identical to the replacement part.

Reference no: EM132984483

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