c On December 31. Year 4, Verdi sold the machine to another company for $35,000. Using the financial statement effects template, show how the sale of the machinery affects the balance sheet and income statement. E8-26. Recording Asset Acquisition, Depreciation, and Disposal Using the information from E8-25, prepare journal entries for parts a,b, and c. Recording Asset Acquisition, Depreciation, and Disposal (FSET) On January 2, Year 1, Verdi Company acquired a machine for $240,000. In addition to the purchase price, Verdi spent $5,000 for shipping and installation, and $7,000 to calibrate the machine prior to use. The company estimates that the machine has a useful life of five years and residual value of $19,500. a. Using the financial statement effects template, report the acquisition of the machine. b. Calculate the annual depreciation expense using straight-line depreciation. Using the financial statement effects template, show how annual depreciation in the first year affects the balance sheet and income statement