Maxil Contractors completed the following transactions and events involving the purchase and operation of equipment in its

Question:

Maxil Contractors completed the following transactions and events involving the purchase and operation of equipment in its business.
2010
Jan. 1 Paid $293,660 cash plus $11,740 in sales tax and $1,500 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $36,000 . Loader costs are recorded in the Equipment account.
Jan. 3 paid $5,100 to enclose the cab and install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated of the loader by another $1,000.
Dec. 31 Recorded annual straight-line depreciation on the loader.
2011
Jan. 1 paid $4,500 to overhaul the loader’s engine, which increased the loader’s estimated useful life by two years.
Feb. 17 paid $1,125 to repair the loader after the operator backs it into a tree.
Dec. 31 Recorded annual straight-line depreciation on the loader.
Required
Prepare journal entries to record these transactions and events.
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...