Southwest Milling Company purchased a front$-$end loader to move stacks of lumber. The loader had a list price of $$122,820.$ The seller

agreed to allow a $5\mathrm{.}50$ percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost

amounted to $$2,370.$ Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $$1,200.$ The loader

operator is paid an annual salary of $$8,580.$ The cost of the company's theft insurance policy increased by $$1,540$ per year as a result

of acquiring the loader. The loader had a four$-$year useful life and an expected salvage value of $$12,100.$

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.

Complete this question by entering your answers in the tabs below.

Record the purchase in general journal format. $($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the

first account field. Round your answers to the nearest whole dollar.$)$

Journal entry worksheet

A

B

C

Record purchase of equipment for cash.

Note: Enter debits before credits.