Reference no: EM132562716

Question - Clarion Co. completed the following transactions and events involving the purchase and operation of equipment in its business.

2016

Jan. 1 Paid $300,000 cash plus $30,000 in sales tax and $12,500 in transportation (FOB shipping point) for a new loader, which is estimated to have a four-year life and a $25,500 salvage value. Loader costs are recorded in the Equipment account.

Jan. 3 Paid $25,000 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 $1,500.

Dec. 31 Recorded double-declining balance depreciation on the loader.

2017

Jan. 1 Paid $40,500 to overhaul the loader's engine, which increased the loader's estimated useful life by two years.

Feb. 17 Paid $1,000 to repair the loader after the operator backed it into a tree.

Dec. 31 Recorded double-declining balance depreciation on the loader.

Dec. 31 Sold the loader for $250,000 cash.

REQUIRED - Make journal entries to record the above transactions and events.