Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business.
2012 Jan. 1 Paid $ 287,600 cash plus $ 11,500 in sales tax and $ 1,500 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four year life and a $20,600 salvage value. Loader costs are recorded in the Equipment account.
Jan. 3 Paid $ 4,800 to enclose the cab and install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $ 1,400.
Dec. 31 Recorded annual straight line depreciation on the loader. 2013
Jan. 1 Paid $ 5,400 to overhaul the loader's engine, which increased the loader's estimated useful life by two years.
Feb. 17 Paid $ 820 to repair the loader after the operator backed it into a tree.
Dec. 31 Recorded annual straight line depreciation on the loader.
Required:
Prepare journal entries to record these transactions and events.