Mercury Delivery Service completed the following transactions and events involving the purchase and operation of equipment for its business.

2017

Jan. 1 Paid $25,860 cash plus $1,810 in sales tax for a new delivery van that was estimated to have a five-year life and a $3,670 salvage value. Van costs are recorded in the Equipment account.

3 Paid $1,850 to install sorting racks in the van for more accurate and quicker delivery of packages. This increases the estimated salvage value of the van by another $230.

Dec. 31 Recorded annual straight-line depreciation on the van.

2018

Jan. 1 Paid $2,064 to overhaul the van’s engine, which increased the van’s estimated useful life by two years.

May 10 Paid $800 to repair the van after the driver backed it into a loading dock.

Dec. 31 Record annual straight-line depreciation on the van. (Round to the nearest dollar.)

Required

Prepare journal entries to record these transactions and events.