Problem 8-4A Computing and revising depreciation; revenue and capital expenditures LO C1, C2, C3 Champion Contractors completed the following transactions involving equipment Year 1 Jan. I Paid $274,000 cash plus $10,960 in sales tax and $1,900 in transportation (F08 shipping point) for a new loader. The loader is estimated to have a four-year 11fe and a $27,400 salvage value. Loader costs are recorded in the Equipment account. Jan. 3 Paid 55,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by ahother $1,500. Dec. 31 Recorded annual straight-line depreciation on the loader. Year 2 Jan. 1 Pald $4,500 to overhaul the loader's engine, which increased the loader's estieated useful 1ife by two years. Feb. 17 Paid $1,125 for ninor repairs to the loader after the operator backed it into a tree. Dec. 31 Recorded anmal straight-1ine depreciation on the loader. Required: Prepare journal entries to record these transactions and events Journal entry worksheet Paid $274,000 cash plus $10,960 in sales tax and $1,900 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a fouryear life and a $27,400 salvage value. Loader costs are recorded in the Equipment account. Note: Enter debits before credits. Journal entry worksheet 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. Note: Enter debits before credits. Journal entry worksheet