2014Jan.1

Paid $270,000 cash plus $10,800 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 $27,000 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.

2015Jan.1

Paid $4,900 to overhaul the loaders engine, which increased the loaders estimated useful life by two years.

Feb.17 Paid $1,225 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.