Champion Contractors completed the following transactions involving equipment.

Year 1

Jan.1Paid $262,000 cash plus $10,480 in sales tax and $1,700 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $26,200 salvage value. Loader costs are recorded in the Equipment account.Jan.3Paid $6,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,800.Dec.31Recorded annual straight-line depreciation on the loader.

Year 2

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

Required:

Prepare journal entries to record these transactions and events.