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Metals Inc. acquired metal recycling equipment acquired on January 3, 2003, at a cost of $240,000, with an estimated useful life of 10 years, an estimated residual value of $15,000, and is depreciated by the straight-line method.
a. What was the book value of the equipment at December 31, 2006, the end of the fiscal year?
b. Assuming that the equipment was sold on July 1, 2007, for $135,000, journalize the entries to record (1) depreciation for the six months until the sale date and (2) the sale of the equipment.
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