outhwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $122,710. The seller agreed to allow a 6.00 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $2,670. Southwest Milling had to hire a specialist to calibrate the loader. The specialists fee was $1,150. The loader operator is paid an annual salary of $40,840. The cost of the companys theft insurance policy increased by $1,830 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $5,800. Required

a. Determine the amount to be capitalized in an asset account for the purchase of the loader. b. Record the purchase in general journal format.