Clarion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business.
2010 |
|
Jan.1 | Paid $255,440 cash plus $15,200 in sales tax and $2,500 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $34,740 salvage value. Loader costs are recorded in the Equipment account. |
Jan.3 | Paid $3,660 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 $1,110. |
Dec. 31 | Recorded annual straight-line depreciation on the loader. |
2011 |
|
Jan.1 | Paid $4,500 to overhaul the loader’s engine, which increased the loader’s estimated useful life by two years. |
Feb.17 | Paid $920 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.
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