ABC purchases a new truck on January 1, 2021 and pays cash. The cost of the truck is $50,000. ABC expects that they will use the truck for 5 years and that at the end of 5 years, the truck will have a salvage value of $10,000.

Beginning in year 3, the truck now is expected to be used for TOTAL of 8 years and the salvage value after 8 years is estimated to be zero. After 6 years, ABC sells the truck for $20,000.

Prepare the entries for all six years for ABC assuming the straight line method of depreciation. What is the cash and income impact in each year? Also, prepare the depreciation assuming the accelerated method of depreciation for 5 years (do not worry about the change in assumption or sale for this portion of the problem).