Equipment acquired on January 8 at a cost of $113,950 has an estimated useful life of 12 years, has an estimated residual value of $7,150, and is depreciated by the straight-line method. Required: a. What was the book value of the equipment at December 31 the end of the fourth year? b. Assuming that the equipment was sold on April 1 of the fifth year for $69,655, journalize the entries to record (1) depreciation for the three months until the sale date and (2) the sale of the equipment. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Round your answer to the nearest whole dollar. CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 114 Interest Receivable 115 Notes Receivable 116 Merchandise Inventory 117 Supplies 119 Prepaid Insurance 120 Land 123 Delivery Truck 124 Accumulated Depreciation-Delivery Truck 125 Equipment 126 Accumulated Depreciation-Equipment 130 Mineral Rights 131 Accumulated Depletion 132 Goodwill 133 Patents LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Owner's Capital 311 Owner's Drawing REVENUE 410 Sales 610 Interest Revenue 620 Gain on Sale of Delivery Truck 621 Gain on Sale of Equipment EXPENSES 510 Cost of Merchandise Sold 520 Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Delivery Truck 523 Delivery Expense 524 Repairs and Maintenance Expense 529 Selling Expenses 531 Rent Expense 532 Depreciation Expense-Equipment 533 Depletion Expense 534 Amortization Expense-Patents 535 Insurance Expense 536 Supplies Expense 539 Miscellaneous Expense 710 Interest Expense 720 Loss on Sale of Delivery Truck 721 Loss on Sale of Equipment b. Assuming that the equipment was sold on April 1 of the fifth year for $69,655, journalize the entries to record the following (Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Round your answer to the nearest whole dollar.): 1. Depreciation for the three months until the sale date How does grading work? PAGE 1 JOURNALACCOUNTING EQUATION Score: 19/25 DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY Jan. 08 Depreciation Expense-Equipment 2,000.00 Accumulated Depreciation-Equipment 2,000.00 Points: 3.8 / 5 2. The sale of the equipment How does grading work? PAGE 2 JOURNALACCOUNTING EQUATION Score: 43/49 DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY Jan. 08 Cash 98,510.00 Accumulated Depreciation-Equipment 34,000.00 Loss on Sale of Equipment 6,470.00 Equipment 113,950.00 Points: 7.9 / 9 Check My Work 1. The depreciation account of the fixed asset being sold or discarded needs to be updated to reflect the months of use in the year it is being discarded or sold. The straight-line method of depreciation calculates the amount of depreciation to be recognized each year. 2. Be sure to record the selling price of the fixed asset. If the company no longer has the fixed asset what account(s) would need to be eliminated? Was there a gain or a loss on the sale