5) The Pacific Company purchased a new piece of equipment, as follows: Date of purchase: List price of equipment: Terms of payment: April 1, 20x 600,000 Down payment at date of purchase: Five equal annual payments: $90,000 120,000 first payment occurring one year from date of purchase) Effective interest rate for Pacific Company (buyer) Effective interest rate for seller 5% 4% Prepare and attach an EXCEL schedule to support your answers. REQUIRED a) Assuming an estimated life of ten years with no estimated salvage value, what amount of depreciation expense (straight-line method) should be recorded by the Pacific Company for the year ended December 31, 20x1? December 31, 20x1. Determine the gain or loss on the sale of the equipment. b) Prepare the appropriate entry to recognize interest expense for the year ended (The company uses the effective interest method to record interest expense.) c) The equipment was sold on July 1, 20x8 for a cash amount of: $ 185,000