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

2014

Jan. 1:  Paid $287,600 cash plus $11,500 in sales tax and $1,500 in transaction (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $20,600 salvage value. Loader costs are recorded in the Equipment account.

Jan. 3:  Paid $4,800 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 $1,400.

Dec. 31: Recorded annual straight-line depreciation on the loader.

2015

Jan. 1:  Paid $5,400 to overhaul the loader's engine, which increased the loader's estimated useful life by two years.

Feb. 17: Paid $820 to repair 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.

 

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