General Electric (GE) purchased equipment on January 1, 2022, for $500,000. The equipment is expected to have a useful life of 10 years and a residual value of $50,000. GE uses the double-declining balance method of depreciation.

Required:

1. Calculate the annual depreciation expense for the first two years.
2. Prepare the journal entry for the depreciation expense for the year ending December 31, 2023.
3. Discuss the impact of depreciation on the financial statements and decision-making.