On April 1, 2015, Westcon Industries purchased new equipment at a cost of $425,000. The useful life of this equipment was estimated at five years, with a residual value of $25,000.

a) Compute the annual depreciation expense for each year until this equipment becomes fully depreciated under Straight-line method.

b) Assume that the equipment is sold at the end of December 2017 for $176,250 cash. Record journal entry for the necessary gain or loss resulting from the sale under the straight-line method.