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 $$7,000$ to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $$2,100.$

December $31$ Recorded annual straight$-$line depreciation on the loader.

Year $2$

January $1$ Paid $$4,100$ to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February $17$ Paid $$1,025$ 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.

Journal entry worksheet

$(2)2$

$3$

$4$

$5$

$6$

Recorded annual straight$-$line depreciation on the loader.

Note: Enter debits before credits.

$\backslash$table$[[$Date$,$General Journal,Debit,Credit$],[$December $31,$ Year $2,$Depreciation expense$-$Equipment,,$],[,$Accumulated depreciation$-$Equipment,,$],[,,,],[,,,]]$