Exercise $8-11$A $($Algo$)$ Events related to the acquisition, use, and disposal of a tangible plant asset: straight$-$line depreciation LO $8-2,8-5$

City Taxi Service purchased a new auto to use as a taxi on January $1,$ Year $1,$ for $$24,900.$ In addition, City paid sales tax and title fees of $$600$ for the vehicle. The taxi is expected to have a five$-$year life and a salvage value of $$6,490.$

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 $$20,580.$ Prepare the general journal entries to record the Year $1$ depreciation and sale of the taxi in Year $3.$