City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $22,500. In addition, City paid sales tax and title fees of $1,270 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $5,540. Required a. Using the straight-line method, compute the depreciation expense for Year 1 and Year 2. b & c. Assume that the taxi was sold on January 1, Year 3, for $18,950. Prepare the general journal entries to record the Year 1 depreciation and sale of the taxi in Year 3. Complete this question by entering your answers in the tabs below. Reg A Req B and C Using the straight-line method, compute the depreciation expense for Year 1 and Year 2. (Round your answers to the nearest whole dollar amount.) Year 1 Year 2 Depreciation expense $ 3,392 $ 3,392 X City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $22,500. In addition, City paid sales tax and title fees of $1,270 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $5,540. Required a. Using the straight-line method, compute the depreciation expense for Year 1 and Year 2. b & c. Assume that the taxi was sold on January 1, Year 3, for $18,950. Prepare the general journal entries to record the Year 1 depreciation and sale of the taxi in Year 3. Complete this question by entering your answers in the tabs below. Req A Req B and C Assume that the taxi was sold on January 1, Year 3, for $18,950. Prepare the general journal entries to record the Year 1 depreciation and sale of the taxi in Year 3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Debit Credit Date Year 1 1 General Journal Depreciation expense Accumulated depreciation 3,392 3,392 2 Year 3 Cash 18,950 6,784 X Accumulated depreciation Gain on sale Taxi 1,964 23,770