1. a. On January 2, 2016 McNally's Corporation acquired equipment for $120,000 cash. The estimated life of the equipment is 5 years and estimated residual value is $20,000. Calculate the depreciation expense using straight-line method. How much would be the balance in the accumulated depreciation account on Dec 31, 2018? What is the carrying amount on Dec 31 2018? b. Write the journal entries needed to be record the purchase of the equipment and the depreciation expense on Dec 31, 2016.