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Problem - On January 1, 20-1, Dan's Demolition purchased two jackhammers for $2,500 each with a salvage value of $100 each and estimated useful lives of four years. On January 1, 20-2, a stronger blade to improve performance was installed in Jackhammer A for $800 cash and the compressor was replaced in Jackhammer B for $200 cash. The compressor is expected to extend the life of Jackhammer B one year beyond the original estimate.
Required -
1. Using the straight-line method, prepare general journal entries for depreciation on December 31, 20-1, for Jackhammers A and B.
2. Enter the transactions for January 20-2 in a general journal.
3. Assuming no other additions, improvements, or replacements, calculate the depreciation expense for each jackhammer for 20-2 through 20-4.
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