P2. Phyllis Planes flies aircraft across the western United States. On January 1, Phyllis purchased an aircraft for $2,500,000. Based on past experience and reliability information about the aircraft, Phyllis expects to keep the aircraft for 20 years. Over this time period, the plane is expected to travel almost 2,000,000 miles. Phyllis has read reports that many aircraft last up to 40 years if properly maintained. At the end of its useful life to the company, Phyllis estimates a resale value of approximately $1,000,000 for the aircraft. Calculate depreciation using the double-declining-balance method. Determine the annual depreciation expense for the airplanes using the double-declining-balance method. Prepare the journal entry to record the first year of depreciation expense. Properly record the asset disposal. At the end of year 18, Phyllis decides to shut down her business and sell the assets. Phyllis enters into a contract and sells the airplane to a competitor for the price of $1,200,000. Assuming that Phyllis uses the straight-line method of depreciation, identify and prepare the necessary journal entries to adjust depreciation and record the asset sale (remember to include any gain or loss)