Clarion Contractors completed the transactions and events involving the purchase and operation of equipment in its business.
2010
Jan: 1 Paid $310,000 cash plus $12,400 in sales tax and $1,900 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $31,000 salvage value. Loader costs are recorded in the Equipment account.
Jan:3 Paid $7,000 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 $2,100.
Dec:31 Recorded annual straight-line depreciation on the loader.
2011
Jan: 1 Paid $4,700 to overhaul the loader's engine, which increased the loader's estimated useful life by two years.
Feb:17 Paid $1,175 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.