Accounting for non-current assets (18 marks) Brisbane Connection purchased an item of equipment for cash $68,000 (ignore GST) on 1 July 2018. It is expected that the useful life of the equipment will be 7 years and the residual value will be $5,000. The entity adopts the straight-line depreciation method. 

Required: 

1) Prepare the journal entry to record the purchase of the equipment in 2018. 

2) Calculate the depreciation expense of this equipment each year and prepare the journal entry for the year ending 30 June 2020. 

3) Show the reporting of this equipment in the balance sheet on 30 June 2019 and 30 June 2020. 

4) Assume the equipment was sold on 1 January 2020 for $49,000 (ignore GST). Prepare the general journal entries to record the sale of the equipment.