Peterson Company purchased machinery for $960,000 on January 1, 2017. Straight-line depreciation has been recorded based on a $60,000 salvage value and a 5-year useful life. The machinery was sold on May 1, 2021 at a gain of $18,000. Assume that the fiscal year is January 1 to December 31.

Question 1. Calculate and prepare the journal entry to record the depreciation expense of 2021