Champion Contractors completed the following transactions involving equipment. Required Prepare journal entries to record these transactions and
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Champion Contractors completed the following transactions involving equipment.
Required
Prepare journal entries to record these transactions and events.
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Jan. 1 3 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. Paid $4,800 to 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. Recorded annual straight-line depreciation on the loader. Dec. 31 Year 2 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 for minor repairs to the loader after the operator backed it into a tree. Dec. 31 Recorded annual straight-line depreciation on the loader.
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1 January 1 Debit Equipment 2876000 Debit Sales Tax Payable 11500 Debit Transportation Costs 1500 Credit Cash 2900000 Explanation This entry records t...View the full answer
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