Answer:
Assuming Sheridan Company uses the perpetual inventory system, the journal entries to record the transactions related to its delivery truck are:
1. To record the payment for an oil change:
Debit | Credit
--- | ---
Vehicle Maintenance Expense | $40
Cash | $40
2. To record the payment for the installation of special shelving units:
Debit | Credit
--- | ---
Delivery Truck | $463
Cash | $463
Step-by-step explanation:
1. The payment of $40 for an oil change is an expense that decreases the value of the company's delivery truck. The journal entry debits the Vehicle Maintenance Expense account and credits the Cash account since the payment was made in cash.
2. The installation of special shelving units is a capital expenditure that enhances the operating efficiency of the truck. The journal entry debits the Delivery Truck asset account for the cost of the shelving units and credits the Cash account for the amount paid in cash.