Patterson Company pays $316,900 for equipment expected to last four years and have a $30,000 salvage value. Prepare journal entries to record the following costs related to the equipment. 1. During the second year of the equipment’s life, $21,550 cash is paid for a new component expected to increase the equipment’s productivity by 10% a year.

Patterson Company pays $316,900 for equipment expected to last four years and have a $30,000 salvage value. Prepare journal entries to record the following costs related to the equipment.

  

1.

During the second year of the equipment’s life, $21,550 cash is paid for a new component expected to increase the equipment’s productivity by 10% a year.   2. During the third year, $5,388 cash is paid for normal repairs necessary to keep the equipment in good working order.   3. During the fourth year, $14,500 is paid for repairs expected to increase the useful life of the equipment from four to five years.