BE9-3 Flaherty Company had the following two transactions related to its delivery truck.

1. Paid $45 for an oil change.

2. Paid $400 to install a special gear unit, which increases the operating effi ciency of the truck. Prepare Flaherty's journal entries to record these two transactions.

The journal entry is given below:

Explanation:

According to the scenario, the journal entry for the given data are as follows:

Given dа ta:

1. Paid $45

2. Paid $400

Journal Entry.

1. Maintenance exp. A/c Dr $45

To Cash A/c $45

(Being the maintenance expense is recorded)

2. Truck Asset A/c Dr $400

To Cash A/c $400

(Being the installing asset is recorded)