DEF Company uses machinery in its manufacturing operation. A machine was purchased on July $1$ for $$37,500,$ and is immediately put into use. The machine is expected to be used for five years, after which it will be sold for scrap at an estimated amount of $$2,500.$ The accountant is preparing financial statements at December $31.$ Under accrual accounting, how much should be recorded in the statement of income as depreciation expense?

$$3,500$

$$7,500$

$$37,500$

$$7,000$