Xpress Delivery Service completed the following transactions and events involving the purchase and operation of equipment for its business.
2010
Jan. 1 Paid $24,950 cash plus $1,950 in sales tax for a new delivery van that was estimated to have a five year life and a $3,400 salvage value. Van costs are recorded in the Equipment account.
Jan. 3 Paid $1,550 to install sorting racks in the van for more accurate and quicker delivery of packages.
This increases the estimated salvage value of the van by another $200.
Dec. 31 Recorded annual straight line depreciation on the van.
2011
Jan. 1 Paid $1,970 to overhaul the van’s engine, which increased the van’s estimated useful life by two years.
May 10 Paid $600 to repair the van after the driver backed it into a loading dock.
Dec. 31 Record annual straight line depreciation on the van. (Round to the nearest dollar.)
Required
Prepare journal entries to record these transactions and events.