On April 30, Year 1, Tilton Products purchased machinery for $55,000. The useful life of this machinery is estimated at 8 years, with an $15,000 residual value. Tilton uses a calendar year-end for financial reporting.

Assume that in its financial statements, Tilton Products uses the 150%-declining-balance method and the half-year convention. Depreciation expense in Year 1 and Year 2 will be:

• $7,500 in Year 1 and $8,906 in Year 2.
• $10,313 in Year 1 and $9,346 in Year 2.
• $10,313 in Year 1 and $10,313 in Year 2.
• $5,157 in Year 1 and $9,346 in Year 2.