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Champion Contractors completed the following transactions involving equipment. Year 1 Paid $314,000 cash plus $12,560 in sales tax and $1,900 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $31,400 salvage value. Loader costs are recorded in the Equipment January 1 account. January 3 Paid $6,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,800. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $4,500 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February 17 Paid $1,125 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded ahnual 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 Paid $314,000 cash plus $12,560 in sales tax and $1,900 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $31,400 salvage value. Loader costs are recorded in the Equipment January 1 account. January 3 Paid $6,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,800. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $4,500 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February 17 Paid $1,125 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded ahnual straight-line depreciation on the loader. Required: Prepare journal entries to record these transactions and events.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Champion Contractors completed the following transactions involving equipment. Year 1 January 1 Paid $314,000 cash plus $12,560 in sales tax and $1,900 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $31,400 salvage value. Loader costs are recorded in the Equipment account. January 3 Paid $6,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,800. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $4,500 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February 17 Paid $1,125 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded aanual straight-line depreciation on the loader. Required: Prepare journal entries to record these transactions and events.
Transcribed Image Text:Champion Contractors completed the following transactions involving equipment. Year 1 January 1 Paid $314,000 cash plus $12,560 in sales tax and $1,900 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $31,400 salvage value. Loader costs are recorded in the Equipment account. January 3 Paid $6,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,800. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $4,500 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February 17 Paid $1,125 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded aanual straight-line depreciation on the loader. Required: Prepare journal entries to record these transactions and events.
Prepare journal entries to record these transactions and events. View transaction list Journal entry worksheet 1 2 3 4 Paid $314,000 cash plus $12,560 in sales tax and $1,900 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four- year life and a $31,400 salvage value. Loader costs are recorded in the Equipment account. Note: Enter debits before credits. Date General Journal Debit Credit January 1, Year 1 Record entry Clear entry View general journal
Transcribed Image Text:Prepare journal entries to record these transactions and events. View transaction list Journal entry worksheet 1 2 3 4 Paid $314,000 cash plus $12,560 in sales tax and $1,900 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four- year life and a $31,400 salvage value. Loader costs are recorded in the Equipment account. Note: Enter debits before credits. Date General Journal Debit Credit January 1, Year 1 Record entry Clear entry View general journal
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