Essay
A company purchased a heating system on January 2,1997,for $225,000.The system had an estimated useful life of 15 years.On January 3,2010,the company completed a renovation of the system that cost of $33,000 and now expects the system to be more efficient to last 8 years beyond the original estimate.The company uses the straight-line method of depreciation.
(a)Prepare the journal entry at January 3,2010,to record the renovation of the heating system.
(b)Prepare the journal entry at December 31,2010,to record the depreciation for 2010.
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