1. Crestfield leases office space. On January 3, the company incurs $28,000 to improve the leased office space. These improvements are expected to yield benefits for 4 years. Crestfield has 2 years remaining on its lease. What journal entry would be needed to record the expense for the first year related to the improvements? Debit Depreciation Expense $7000; credit Accumulated Depreciation $7000. Debit Amortization Expense $7000; credit Accumulated Amortization-Leasehold Improvements $7000. Debit Depletion Expense $28,000; credit Accumulated Depletion $28,000. Debit Depletion Expense $14,000; credit Accumulated Depletion $14,000. Debit Amortization Expense $14,000, credit Accumulated Amortization-Leasehold Improvements $14,000. 2. A company purchased a weaving machine for $231,450. The machine has a useful life of 8 years and a residual value of $12,500. It is estimated that the machine could produce 755,000 bolts of woven fabric over its useful life. In the first year, 107,500 bolts were produced. In the second year, production increased to 111,500 units. Using the units- of-production method, what is the amount of depreciation expense that should be recorded for the second year? $32,335 $31,175 $63,510. $32,955 $34,181. 3. The following information is available on a depreciable asset owned by Mutual Savings Bank: Purchase date July 1, Year 1 Purchase price $82,600 Salvage value $11,400 Useful life 8 years Depreciation method straight-line The asset's book value is $64,800 on July 1, Year 3. On that date, management determines that the asset's salvage value should be $6400 rather than the original estimate of $11,400. Based on this information, the amount of depreciation expense the company should recognize during the last six months of Year 3 would be: $2433.33 $2700.00 $4866.67 $1958.33 $2366.37