Year 1 January 1 Paid $294,000 cash plus $11,760 in sales tax and $1,700 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $29,400 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 $4,800 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February 17 Paid $1,200 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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Year 1
January 1 Paid $294,000 cash plus $11,760 in sales tax and $1,700 in transportation (FOB shipping point) for a new
loader. The loader is estimated to have a four-year life and a $29,400 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 $4,800 to overhaul the loader's engine, which increased the loader's estimated useful life by two
years.
February 17 Paid $1,200 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.
View transaction list
Journal entry worksheet
1
2
3
4
5
6
Paid $294,000 cash plus $11,760 in sales tax and $1,700 in transportation
(FOB shipping point) for a new loader. The loader is estimated to have a four-
year life and a $29,400 salvage value. Loader costs are recorded in the
Equipment account.
Note: Enter debits before credits.
Date
General Journal
Debit
Credit
>
Transcribed Image Text:Year 1 January 1 Paid $294,000 cash plus $11,760 in sales tax and $1,700 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $29,400 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 $4,800 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February 17 Paid $1,200 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. View transaction list Journal entry worksheet 1 2 3 4 5 6 Paid $294,000 cash plus $11,760 in sales tax and $1,700 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four- year life and a $29,400 salvage value. Loader costs are recorded in the Equipment account. Note: Enter debits before credits. Date General Journal Debit Credit >
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