Acquisition, Depreciation, and Sale of an Asset On January 2, 1998, Union Oil Company purchased a new airplane. The following costs are related to the purchase: Airplane, base price.. Cash discount Sales tax Delivery charges $112,000 3,000 4,000 1,000 Required: 1. Prepare the journal entry to record the payment of these items on January 2, 1998. 2. Ignore your answer to part 1 and assume that the airplane cost $90,000 and has an expected useful life of five years or 1,500 hours. The estimated salvage value is $3,000. Using units-of-production depreciation and assuming that 300 hours are flown in 1999, calculate the amount of depreciation expense to be recorded for the second year. 3. Ignore the information in parts 1 and 2 and assume that the airplane costs $90,000, that its expected useful life is five years, and that its estimated salvage value is $5,000. The company now uses the straight- line depreciation method On January 1, 2001, the following balances are in the related accounts: Airplane Accumulated Depreciation, Airplane .... $90,000 51,000 Prepare the necessary journal entries to record the sale of this airplane on July 1, 2001, for $40,000