Champion Contractors completed the following transactions involving equipment. Year 1 Jan. 1 Paid $294,000 cash plus $11,760 in sales tax and $1,900 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $29,400 salvage value. Loader costs are recorded in the Equipment account. Jan. 3 Paid $5,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,500. Dec. 31 Recorded annual straight-line depreciation on the loader. Year 2 Jan. 1 Paid $4,500 to overhaul the loaders engine, which increased the loaders estimated useful life by two years. Feb. 17 Paid $1,125 for minor repairs to 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.

(Jan 1 Year 1)- Paid $294,000 cash plus $11,760 in sales tax and $1,900 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $29,400 salvage value. Loader costs are recorded in the Equipment account.

(Jan 3 Year 1)- Paid $5,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,500.

(Dec 31 Year 1)- Recorded annual straight-line depreciation on the loader.

(Jan 1 Year 2)- Paid $4,500 to overhaul the loaders engine, which increased the loaders estimated useful life by two years.

(Feb 17 Year 2)- Paid $1,125 for minor repairs to the loader after the operator backed it into a tree.

(Dec 31 Year 2)- Recorded annual straight-line depreciation on the loader.