Mercury Inc. purchased equipment in 2016 at a cost of $315,000. The equipment was expected to produce 570,000 units over the next five years and have a residual value of $30,000. The equipment was sold for $160,500 part way through 2018. Actual production in each year was: 2016 81,000 units; 2017 129,000 units; 2018 65,000 units. Mercury uses units-of-production depreciation, and all depreciation has been recorded through the disposal date. Required 1. Prepare the journal entry to record the sale. 27 2. Assuming that the equipment was sold for $197,500, prepare the journal entry to record the sale