Bonds and Amortization

You purchase equipment. You will pay $3,000 a year for 4 years beginning one year from now. You also paid $100 in delivery and $75 in installation fees. The going interest rate for loans of this kind is 6%. The equipment has a useful life of S years and you expect to sell It at the end of S years for $1,200. The equipment is expected to produce 100,000 units over the course cf its life. Year 125,000 units, Year 2 20,000 units, year 3 15,000 units, year 4, 30,000 units, year 5 10,000 units 1. Please complete the following depreciation schedules and give the journal entries for depreciation expense in the first year under each method. Straight line Year Depreciation Expense Cost Book Value Acquisition 5 Journal Entry Units of Production Year Depreciation Expense Cost Book Value Acquisition 2 Journal entry Declining Balance Assum Reces Book Value Year Depreciation Expense Cost Acquisitiorn 4 Journal Entry