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finding the year 2, annual straight-line depreciation Champion Contractors completed the following transactions involving equipment Year 1 January 1 Paid $278,000 cash plus $11,120 in
finding the year 2, annual straight-line depreciation
Champion Contractors completed the following transactions involving equipment Year 1 January 1 Paid $278,000 cash plus $11,120 in sales tax and $1,800 in transportation (FOB shipping point for a new loader. The loader is estimated to have a four-year life and a $27,800 salvage value. Loader costs are recorded in the Equipment account. January 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. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $4,500 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February 17 paid $1,125 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded annual straight-line depreciation on the loader. Required: Prepare journal entries to record these transactions and events
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