Question

Belltone Company made the following expenditures related to its 10-year-old manufacturing facility:

1. The heating system was replaced at a cost of $165,000. The cost of the old system was not known. The company accounts for improvements as reductions of accumulated depreciation.
2. A new wing was added at a cost of $660,000. The new wing substantially increases the productive capacity of the plant.
3. Annual building maintenance was performed at a cost of $18,000.
4. All of the equipment on the assembly line in the plant was rearranged at a cost of $26,000. The rearrangement clearly increases the productive capacity of the plant.

Required:
Prepare journal entries to record each of the above expenditures. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Event	General Journal	Debit	Credit
1	Accumulated depreciation	$165,000	-
	Cash	-	$165,000
	(To record the replacement of the heating system)
2	Building	$660,000	-
	Cash	-	$660,000
	(To record the additions to the building)
3	Maintenance expense	$18,000	-
	Cash	-	$18,000
	(To record the annual maintenance cost)
4	Equipment	$26,000	-
	Cash	-	$26,000
	(To record the rearrangement cost)