On Jan 2, CMW Inc buys a $60,000 piece of equipment paying $20,000 down and signing a 4 year note for the remaining balance. On Jan 2, CMW Inc paid $1,000 freight cost and $5,000 installation cost to get the equipment ready to be used. The useful life of the equipment is 8 years. The equipment has an estimated residual value of $8,000. CMW Inc uses straight line depreciation.

1. Prepare the journal entry or entries needed to record the equipment cost as of Jan 2.

2. Calculate the annual depreciation. Please use the space below the JE table on the MSWord link file to show your calculation of annual depreciation.

3. Prepare the journal entry as of Dec 31 to record depreciation.

4. CMW Inc sold the piece of equipment on Dec 31 at the end of 6 years for $24,000 cash. Prepare the entry to record the sale of the equipment. Assume depreciation has been recorded through the sale date.