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Question - On January 1, 2015, Musseau Mills purchased a paper machine for $175,000 that was expected to last 6 years and have a residual value of $16,000. On January 1, 2018, Musseau paid $25,000 cash for improvements to the machine which increased the total estimated useful life from 6 years to 10 years. It also increased the residual value to $19,000. Musseau uses straight-line depreciation. (Ignore the half-year rule for 2015.)
Required -
A What account should be debited to record the improvement?
B) What amount of depreciation should be recorded for 2018?
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