O Equipment acquired on January 2, Year 1, at a cost of $525,000 has an estimated useful life of 8 years and an estimated residual value of $45,000. Required: a. What is the annual amount of depreciation for the first 3 years, assuming the straight-line method of depreciation is used? Depreciation Expense Year 1 Year 2 Year 3 b. What is the book value of the equipment on January 1, Year 4? $ c. Assuming that the equipment is sold on January 2, Year 4, for $326,000, journalize the entry for the sale. If an amount box does not require an entry, leave it blank. d. Assuming that the equipment is sold on January 2, Year 4, for $394,000, journalize the entry for the sale. If an amount box does not require an entry, leave it blank. 88

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