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City Toxi Service purchased a new auto to use as a taxi on January 1, Year 1 , for $25,800. In addition, City paid sales
City Toxi Service purchased a new auto to use as a taxi on January 1, Year 1 , for $25,800. In addition, City paid sales tax and title fees of $1,000 for the vehicle. The taxi is expected to have a five-year life and a solvage value of $5,480. 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 \$21,013. Prepare the general journal entries to fecord the Year 1 depreciation and sale of the taxi in Year 3. Complete this question by entering your answers in the tabs below. Using the straight-line method, compute the depreciation expense for Year 1 and Year 2 . (Round your answers to the nearest Whole dollar amount.)
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