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Required: Prepare journal entries to record these transactions and events. ...

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Accounting

Required:

Prepare journal entries to record these transactions and events.

Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business.

2014
Jan. 1

Paid $282,000 cash plus $11,280 in sales tax and $2,000 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $28,200 salvage value. Loader costs are recorded in the Equipment account.
Jan. 3

Paid $7,000 to enclose the cab and install air-conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $2,100.
Dec. 31 Recorded annual straight-line depreciation on the loader.

2015
Jan. 1

Paid $4,800 to overhaul the loaders engine, which increased the loaders estimated useful life by two years.
Feb. 17 Paid $1,200 to repair the loader after the operator backed it into a tree.
Dec. 31 Recorded annual straight-line depreciation on the loader.

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