How would your journal entry change

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Reference no: EM133492841

Case: The following transactions occurred during 2020. Assume that depreciation of 10% per year is charged on all machinery and 5% per year on buildings, on a straight-line basis, with no estimated residual value. Assume also that depreciation is charged for a full year on all fixed assets that are acquired during the year, and that no depreciation is charged on fixed assets that are disposed of during the year.

Jan. 30 A building that cost $132,000 in 2003 was torn down to make room for a new building structure. The wrecking contractor was paid $5,100 and was permitted to keep all materials salvaged.
Mar. 10 A new part costing $2,900 was purchased and added to a machine that was purchased in 2018 for $16,000. The new part replaces an original machine part and does not extend the machine's useful life. The old part's cost was not separable from the original machine's cost.
Mar. 20 A gear broke on a machine that cost $9,000 in 2015, and the gear was replaced at a cost of $185. The replacement does not extend the machine's useful life.
May 18 A special base that was installed for a machine in 2014 when the machine was purchased had to be replaced at a cost of $5,500 because of defective workmanship on the original base. The cost of the machinery was $14,200 in 2014. The cost of the base was $3,500, and this amount was charged to the Machinery account in 2014.
June 23 One of the buildings was repainted at a cost of $6,900. It had not been painted since it was constructed in 2016.

Required

Question 1: Prepare general journal entries for the transactions.
Question 2: Assume that the gear replacement purchased on March 20 extends the machine's useful life. How would your journal entry change?

Reference no: EM133492841

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