Chevron Corporation purchased a drilling rig on January 1, 2020, for $800,000. The rig is expected to have a useful life of 10 years and a residual value of $80,000. Chevron uses the sum-of-the-years'-digits method of depreciation.

Required:

1. Calculate the annual depreciation expense for the first three years.
2. Prepare the journal entry for the depreciation expense for the year ending December 31, 2023.
3. Discuss the impact of different depreciation methods on the financial statements.