1) Caleb Inc. owns equipment, which was purchased on January 1, 2013, for $90,000 by paying $20,000 down payment and issuing a note payable for the balance. The equipment had an estimated useful life of 10 years, and an estimated residual value of $10,000. The company uses the straight-line method of amortization and has a December 31 year-end. On April 30, 2015, the machine was sold for $55,000.

Required:

A) Prepare the journal entry to record the acquisition of the machine.

B) Assuming that the amortization was correctly calculated and recorded in 2013 and 2014, prepare the journal entries to update the amortization and record the sale of the machine on April 30, 2015.

C) If the company had used the double-declining-balance method to amortize the cost of the machine:

1. What amount of amortization would have been recorded in 2013 and 2014?

2. What journal entries would have been required to update the amortization and record the sale of the equipment on April 30, 2015.