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Calculate the annual depreciation expense

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Question - Recording Asset Acquisition, Depreciation, and Disposal - On January 2, 2016, Verdi Company acquired a machine for $87,000. In addition to the purchase price, Verdi spent $3,000 for shipping and installation, and $3,000 to calibrate the machine prior to use. The company estimates that the machine has a useful life of 8 years and a residual value of $9,000.

Required -

a. Prepare journal entries to record the acquisition costs.

b. Calculate the annual depreciation expense using straight-line depreciation and prepare a journal entry to record depreciation expense for 2016.

c. On December 31, 2019, Verdi sold the machine to another company for $33,000. Prepare the necessary journal entry to record the sale.

Reference no: EM132890817

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