Libra Corporation purchased a truck for $50,000. The company expected the truck to have an useful life of 100,000 miles, with an estimated residual value of $5,000 at the end of that time. During the fourth year, the truck was driven 25,000 miles.

Required:

Show your working for each of the following:

a. Compute the depreciation for the fourth year using the production method  (2 points)

b. Prepare the necessary journal entry to record the depreciation. (2 points