Hammer MC Corporation acquired real estate that contained land, building and equipment. The property cost Harding $1,900,000. Hammer MC paid $350,000 and issued a note payable for the remainder of the cost. An appraisal of the property reported the following values: Land, $374,000; Building, $1,100,000 and Equipment, $726,000. Assume that Hammer MC uses the units-of-production method when depreciating its equipment. Hammer MC estimates that the purchased equipment will produce 1,000,000 units over its 5-year useful life and has a salvage value of $34,000. Hammer MC produced 265,000 units with the equipment by the end of the first year of purchase.

Which amount will hammer MC record for depriciation expense for the equipment in first year? show all your work.