1. Red River Inc purchased a machine on January 1, 2020 for $75,000. The estimated useful life of the machine is 5 years, the salvage value is $10,000, and the company uses the double-declining balance method to depreciate fixed assets.

a. How much depreciation should Red River record each year of the assets life?

b. What journal entry should the company record if at the end of the fifth year, the machine and $19,000 are exchanged for a car valued at $25,000?