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Problem - Equipment acquired on January 6 at a cost of $375,000 has an estimated useful life of 20 years and an estimated residual value of $25,000.
Required -
a. What was the annual amount of depreciation for the Years 1-3 using the straight-line method of depreciation?
b. What was the book value of the equipment on January 1 of Year 4?
c. Assuming that the equipment was sold on January 3 of Year 4 for $300,000, journalize the entry to record the sale.
d. Assuming that the equipment had been sold on January 3 of Year 4 for $325,000instead of $300,000, journalize the entry to record the sale.
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