On January 2, 2016, Verdi Company acquired a machine for $89,000. In addition to the purchase price, Verdi spent $3,000 for shipping and installation, and $3,500 to calibrate the machine prior to use. The company estimates that the machine has a useful life of 5 years and a residual value of $9,000.

a. Prepare journal entries to record the acquisition costs.

b. Calculate the annual depreciation expense using straight-line depreciation and prepare a journal entry to record depreciation expense for 2016.

c. On December 31, 2019, Verdi sold the machine to another company for $12,500. Prepare the necessary journal entry to record the sale.

\begin{tabular}{|lllll|} \hline Description & \multicolumn{3}{c}{ Debit } & \multicolumn{2}{c|}{ Credit } \\ \hline & & 0 & 0 \\ \hline & 0 & 0 \\ \hline \end{tabular} \begin{tabular}{|cc|c|c|} \hline Description & & Debit & \multicolumn{1}{c|}{ Credit } \\ \hline & = & 0 & 0 \\ & = & 0 & 0 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline Description & Debit: & Credit \\ \hline Cash & 0 & 0 \\ \hline Accumulated depreciation & 0 & 0 \\ \hline & 0 & 0 \\ \hline & 0 & 0 \\ \hline \end{tabular}