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Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business. 2016 Jan. 1 Paid $314,000 cash plus
Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business.
2016
Jan. | 1 | Paid $314,000 cash plus $12,560 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 $31,400 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. |
2017
Jan. | 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.
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