Boat Ltd. has a major asset that has just been purchased and has been segregated into the following significant components made up of spare parts and major inspections. Component D consists of a group of insignificant components lumped together with an average cost and useful life.

Component Quantity Original Unit Cost Residual Value Useful Life

A. 4 $ 123,000. $ 5,300 12 years

B 6 44,000 0 3 years

C 2 8,500 850 6 years

D 4 2,400 0 2 years

Required: 1. Assuming straight-line is the appropriate method of depreciation, what is the amount of depreciation in year one? (Round down the intermediate calculations to the nearest whole dollar. Round final answer to nearest whole dollar.)

2-b. The new major spare part has a value of $64,000. Prepare the journal entry that would be recorded when 1 unit of component B is replaced at the end of year 2. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round the intermediate calculations to two decimal places. Round down final answers to the nearest whole dollar.)