Timothy Company acquired and placed into use a heavy factory machine on October 1, 1998. The machine had an invoice price of \(\$ 360,000\), but the company received a \(3 \%\) cash discount by paying the bill on the date of acquisition. An employee of Timothy Company hauled the machine down a city street without a permit. As a result, the company had to pay a \(\$ 1,500\) fine. Installation and testing costs totaled \(\$ 35,800\). The machine is estimated to have a \(\$ 35,000\) salvage value and a seven-year useful life. (A fraction should be used for the DDB calculation rather than a percentage.)

a. Prepare the journal entry to record the acquisition of the machine.

b. Prepare the journal entry to record depreciation for 1998 under the double-decliningbalance method.

c. Assume Timothy Company used the straight-line depreciation method. At the beginning of 2001, it estimated the machine will last another six years. Prepare the journal entry to record depreciation for 2001 . The estimated salvage value would not change.