Part 1: Marks Consulting purchased equipment costing $45,000 on January 1, Year 1. The equipment is estimated to have a salvage value of $5,000 and an estimated useful life of 8 years. Straight-line depreciation is used. If the equipment is sold on January 1, Year 5 for $22,500, the journal entry to record the sale will include a:

PART 2:

Martin Company purchases a machine at the beginning of the year at a cost of $72,000. The machine is depreciated using the straight-line method. The machines useful life is estimated to be 5 years with a $5,000 salvage value. Depreciation expense in year 4 is: