On January 1, 2013, Regal Manufacturing purchased a machine for $850,000. Regal Manufacturing expects the machine to remain useful for eight years and to have a residual value of $40,000. Regal Manufacturing uses the straight-line method to depreciate its machinery. Regal Manufacturing used the machine for five years and sold it on January 1, 2018, for $325,000.
1. Compute accumulated depreciation on the machine at January 1, 2018 (same as December 31, 2017).
2. Record the sale of the machine on January 1, 2018.