Journal Entries for Depreciation (Alternates are 8-31 and 8-33.) The Alaska Airlines balance sheet dated June 30, 2003 included the following ($ in millions): Property and equipment Flight equipment Ground property and equipment Deposits for future flight equipment Less accumulated depreciation and amortization Net Property and Equipment $2,279.8 441.7 80.3 (870.1) $1,931.7 Assume that on July 1, 2003, Alaska acquired some new maintenance equipment for $880,000 cash. The equipment had an expected useful life of 5 years and an expected residual value of $80,000. Alaska uses straight-line depreciation.

1. Prepare the journal entry that would be made annually for depreciation on the new equipment. 2. Suppose Alaska sold some of the equipment they originally purchased on July 1, 2003. The equipment being sold had an original cost of $220,000 and an expected residual value of $20,000. Alaska sold the equipment for $160,000 cash 2 years after the purchase date. Prepare the journal entry for the sale. 3. Refer to requirement 2. Suppose Alaska had sold the equipment for $110,000 cash, instead of $160,000. Prepare the journal entry for the sale.