City Taxi services purchased an auto to use as a taxi on January 1, year 1, for $25,400. In addition, city paid sales tax and title fees of $1,050 for the vehicle.the vehicle is expected to have a 5 year life and a salvage value of $6,970. using the straight line method, compute the depreciation expense for year 1 and year 2. Assume that the taxi was sold on January 1, year 3 for $21,457. prepare the journal entries to record the year 1 depreciation and sale of the taxi in year 3.