Year 1

January 1	Paid $286,000 cash plus $11,440 in sales tax and $1,600 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $28,600 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 $4,200 to overhaul the loaders engine, which increased the loaders estimated useful life by two years.
February 17	Paid $1,050 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.

No	Date	General Journal	Debit	Credit
1	January 1, Year 1	Equipment	299,040
		Cash		299,040
2	January 3, Year 1	Equipment	5,000
		Cash		5,000
3	December 31, Year 1	Depreciation expenseEquipment
		Accumulated depreciationEquipment
4	January 1, Year 2	Equipment	4,200
		Cash		4,200
5	February 17, Year 2	Repairs expenseEquipment	1,050
		Cash		1,050
6	December 31, Year 2	Depreciation expenseEquipment
		Accumulated depreciationEquipment