$4$

City Taxi Service purchased a new auto to use as a taxi on January $1,$ Year $1,$ for $$28,600.$ In addition, City paid sales tax and title fees of $$660$ for the vehicle. The taxi is expected to have a five$-$year life and a salvage value of $$6,100.$

Required

a$.$ Using the straight$-$line method, compute the depreciation expense for Year $1$ and Year $2.$

b & c$.$ Assume that the taxi was sold on January $1,$ Year $3,$ for $$22,995.$ Prepare the general journal entries to record the Year $1$ depreciation and sale of the taxi in Year $3.$

Complete this question by entering your answers in the tabs below.

Req B and C

Using the straight$-$line method, compute the depreciation expense for Year $1$ and Year $2.($Round your answers to the nearest whole dollar amount.$)$

References

$\backslash$table$[[,$Year $1,$Year $2],[$Depreciation expense,,$]]$