On 1/1/14 XXX purchased a new lathe for $500,000 installed. The physical life of the lathe is 8 years with a salvage value of $10,000 at the end of that time period. The lathe was purchase for a contract that will provide revenue to Meganco for 5 years. The lathe will be sold at the end of the contract for $40,000.

Required: Make the required journal entry on 12/31/14 and 12/31/15 assuming that the lathe is depreciated using 200% double declining balance.