1. Carson Company purchased a depreciable asset for $420,000. The estimated salvage value is $28,000, and the estimated useful life is 10,000 hours. Carson used the asset for 1,500 hours in the current year. The activity method will be used for depreciation. What is the depreciation expense on this asset in the current year?

2.

Downing Company issues $5,000,000, 10%, 5-year bonds on January 1, 2020. The bonds pay interest semiannually on June 30 and December 31. The bonds are issued to yield 8%.

a) Looking at the rates involved, will this bond sell at a discount or premium?

b) Calculate the issue price of the bonds in dollars

c) Calculate the issue price of the bonds as a percent

d) Make the journal entry to record the sale of the bond