Champion Contractors completed the following transactions involving equipment. Year 1 January 1 Paid $306,000 cash plus...

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Champion Contractors completed the following transactions involving equipment. Year 1 January 1 Paid $306,000 cash plus $12,240 in sales tax and $1,600 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. January 3 Paid $4,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,200. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $4,300 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February 17 Paid $1,075 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded annual straight-line depreciation on the loader. Required: Prepare journal entries to record these transactions and events. Champion Contractors completed the following transactions involving equipment. Year 1 January 1 Paid $306,000 cash plus $12,240 in sales tax and $1,600 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. January 3 Paid $4,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,200. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $4,300 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February 17 Paid $1,075 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded annual straight-line depreciation on the loader. Required: Prepare journal entries to record these transactions and events.

Answer rating: 100% (QA)

The journal entries are given below Date General Journal Debit Credit January 1 E... View the full answer