Cadillac Construction Company uses the retirement method to determine depreciation on its small tools. During 2016, the first year of the company's operations, tools were purchased at a cost of $8,500. In 2018, tools originally costing $2,200 were sold for $300 and replaced with new tools costing $2,600. Required: 1. Prepare journal entries to record each of the above transactions. 2. Prepare journal entries to record each of the above transactions, assuming that the company uses the replacement depreciation method instead of the retirement method