City Taxi Service purchased a new auto to use as a taxi on January $1,$ Year $1,$ for $$20,200.$ In addition, City paid sales tax and title fees of $$530$ for the vehicle. The taxi is expected to have a five$-$year life and a salvage value of $$5,790.$

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 $$16,967.$ 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 $$16,967.$ 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.$)$

Journal entry worksheet

$1$

$2$

Record depreciation expense.

Note: Enter debits before credits.

$\backslash$table$[[$Date$,$General Journal,Debit,Credit$],[$Year $1,$grad,,$],[,,,],[,,,],[,,,],[,,,]]$