On January 1, 20X1, Nu Corporation purchased equipment for $80,000 cash. The equipment has a useful life of 5 years and no residual value. Calculate the depreciation expense for the year 20X1 using the straight-line method.

Additionally, Nu Corporation made the following transactions during 20X1:

• February 1: Exchanged a portion of the equipment for a newer model with a fair value of $20,000. The portion exchanged had a carrying amount of $15,000.

Required:

• Calculate the total depreciation expense for the year 20X1.
• Prepare journal entries for the equipment-related transactions.