Reference no: EM131533983

Question: Clarion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business. 2010 Jan. 1 Paid $255,440 cash plus $15,200 in sales tax and $2,500 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $34,740 salvage value. Loader costs are recorded in the Equipment account. Jan. 3 Paid $3,660 to enclose the cab and install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,110. Dec. 31 Recorded annual straight-line depreciation on the loader. 2011 Jan. 1 Paid $4,500 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. Feb. 17 Paid $920 to repair the loader after the operator backed it into a tree. Dec. 31 Recorded annual straight-line depreciation on the loader. Required Prepare journal entries to record these transactions and events.