On April 2, Year 1, Victor, Incorporated acquired a new piece of filtering equipment. The cost of the equipment was $160,000 with a residual value of $20,000 at the end of its estimated useful lifetime of 4 years. Victor uses a calendar year-end for financial reporting.

Assume that in its financial statements, Victor uses straight-line depreciation and rounds depreciation for fractional years to the nearest whole month. Depreciation recognized on this equipment in Year 1 and Year 2 will be:

$20,000 in Year 1 and $35,000 in Year 2.

$26,250 in Year 1 and $35,000 in Year 2.

$23,333 in Year 1 and $35,000 in Year 2.

$40,000 in Year 1 and $30,000 in Year 2.