Assume Rapid Transport Ltd.'s balance sheet includes the following assets under Property, Plant, and Equipment Land, Buildings, and Motor Carrier Equipment Rapid has a separate accumulated depreciation account for each of these assets except land Further, assume that Rapid completed the following transactions: (Click the icon to view the transactions.) Requirements 1. Record the transactions in Rapid Transport Ltd.'s journal. 2. How does management choose which depreciation method to use? Requirement 1. Record the transactions in Rapid Transport Ltd. 's journal. January 2, 2020 Sold motor-carrier equipment with accumulated depreciation of $66,500 (cost of $131,000) for $66,000 cash. Purchased similar new equipment with a cash price $187,000 Journalize the sale of the motor carrier equipment. (Record debits first, then credits. Explanations are not required.) Debit Credit Date Accounts January 2 ### Record the purchase of the new motor carrier equipment Date Accounts Debit Credit January 2 July 3. Sold a building that had cost $640,000 and had accumulated depreciation of $ 160,000 through December 31 of the preceding year Depreciation is computed on a straight-line basis. The building had a 40-year useful life and a residual value of $250 000. Rapid received $108,000 cash and a $367,125 note receivable Record the depreciation expense for July 3. (Use the full months for calculations. Round to the nearest whole dollar.) Accounts Debit Date Credit July 3 Record the sale of the building on July 3 Date Accounts Debit Credit July 3 October 29. Purchased land and a building for a single price of $423,000. An independent appraisal valued the land at $159,000 and the building at $300,000. (Hold all decimals for interim calculations. Round your final answer to the near dollar.) Date Accounts Debit Credit October 29 December 31: Recorded depreciation as follows: New motor-carrier equipment has an expected useful life of six years and an estimated residual value of 5% of cost. Depreciation is computed on the double-diminishing-balance method Depreciation on buildings is computed by the straight-line method. The new building carries a 40-year useful life and a residual value equal to 10% of its cost Record the depreciation expense on the equipment for December 31. (Hold all decimals for interim calculations. Round your final answer to the nearest whole dollar.) Date Accounts Debit Credit December 31 Record the depreciation expense on the buildings for December 31. (Hold all decimals for interim calculations. Round your final answer to the nearest whole dollar.) DEL Date Accounts Debit Credit December 31 Requirement 2. How does management choose which depreciation method to use? Management chooses the method that reflects the pattern in which the asset will be used. For example, if the asset generates revenue evenly over time, the method should be used The method is suited for those assets that wear out due to physical use while the V method is best for assets that generate greater amounts of revenue earlier in their useful lives Transactions 2020 Jan. 2 Sold motor-carrier equipment with accumulated depreciation of $66,500 (cost of $131,000) for $66,000 cash Purchased similar new equipment with a cash price $ 187,000 July 3 Sold a building that had cost $640,000 and had accumulated depreciation of $160,000 through December 31 of the preceding year. Depreciation is computed on a straight-line basis. The building had a 40-year useful life and a residual value of $250,000. Rapid received $108,000 cash and a $367,125 note receivable. Oct. 29 Purchased land and a building for a single price of $423,000. An independent appraisal valued the land at $159,000 and the building at $300,000. Dec. 31 Recorded depreciation as follows: New motor-carrier equipment has an expected useful life of six years and an estimated residual value of 5% of cost. Depreciation is computed on the double-diminishing-balance method. Depreciation on buildings is computed by the straight-line method. The new building carries a 40-year useful life and a residual value equal to 10% of its cost