Gargon Galactic Food Corporation purchased from Dalicron Tractor & Implement Compay15 new Case IH Magnum Model 380 tractors on October 31 of the current year at a price of $345,180 per tractor. In payment for the tractors, Gargon traded in 20 Case IH PUMA Model 220 CVT tractors for which it had paid $150,000 per tractor 20 years ago, $2,000,000 of cash, and its promissory note for $2,500,000. Accumulated depreciation on each of the Case IH PUMA Model 220 CVT tractors was $63,750 through the date of sale. The new tractors have estimated useful lives at the time of purchase of 20 years, and each tractor has an estimated residual value of $34,618. The company reports on a calendar year basis.

Required:

1. Prepare the journal entry to record the purchase of the new tractors.

2. Prepare a complete depreciation schedule, beginning with the current year, under each of the

   methods listed below assuming that Gargon employs the half-year convention. 1) Straight-line

2) Double declining balance

C. Four years after buying them, Gargon sells 4 of the tractors for $295,000 cash per tractor. Prepare in good form the journal entry to record the sale under the alternative depreciation methods for which you prepared depreciation schedules in Par B.