Question

Chapter 08 Homework A Saved Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business. points 2017 Jan. 1 Paid $306,000 cash plus $12,240 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 $30, 600 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. eBook 2018 Jan. 1 Paid $4,400 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. Feb. 17 Paid $1,100 to repair the loader after the operator backed it into a tree. Dec. 31 Recorded annual straight-line depreciation on the loader. Print Required: Prepare journal entries to record these transactions and events. References View transaction list Journal entry worksheet 2 3 4 5 6 Paid $306,000 cash plus $12,240 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 $30,600 salvage value. Loader costs are recorded in the Equipment account. Note: Enter debits before credits. General Journal Debit Credit Date Jan 01, 2017 Record entry Clear entry View general journal

Answer 1

Cost of equipment = 306000 + 12240 + 1500

= $319,740

Journal entry:-

Jan.01 2017	Equipment	$319,740
	cash		$319,740
	(To record equipment)