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Problem 8-4A Computing and revising depreciation; revenue and capital expenditures LO C1, C2, C3 Champion Contractors completed the following transactions involving equipment. Year 1 Jan. 1 Paid $302,000 cash plus $12,080 in sales tax and $1,600 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $30, 200 salvage value. Loador costs are recorded in the Equipment account. 3 Paid $5,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,500. Dec. 31 Recorded annual straight-line depreciation on the loader. Year 2 Jan. 1 Paid $4,600 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. Feb. 17 Paid $1,150 for minor repairs to the loader after the operator backed it into a tree. Dec. 31 Recorded annual straight-line depreciation on the loader. Required: Prepare Journal entries to record these transactions and events. View transaction list Journal entry worksheet 1 3 4 6 5 6 Journal entry worksheet Paid $4,600 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. Note: Enter debits before credits. Date General Journal Debit Credit Jan 1, Year 2 Record entry Clear entry View general journal Journal entry worksheet 2 3 4 6 Paid $1,150 for minor repairs to the loader after the operator backed it into a tree. Note: Enter debits before credits. Date General Journal Debit Credit Feb 17, Year 2 Record entry Clear entry View general Journal Journal entry worksheet

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