Birkey Company purchased equipment on January 1, 2020, at a total cost of $99,000. The machinerys estimated useful life is 8 years or 60,000 hours, and its residual value is $9,000. During 2020 and 2021, the machinery was used 7,000 and 8,00 hours, respectively.

This information will be used for Parts 1, 2, and 3 of this problem. It will be repeated in each part.

Calculate the depreciation expense for 2020 using the straight-line method.

Prepare the adjusting journal entry to record depreciation on Dec. 31, 2020 (straight-line).

What is the book value on Dec. 31, 2020, after the adjusting entry (straight-line)?

What is the book value on Dec. 31, 2021 after the second year's adjusting entry (straight-line)?