QS 3-7Preparing adjusting entries (annual)- depreciation LO4 Jan 1, 2017 Dec. 31, 2017 Apr. Aug Oct Dec. 2017 Equipment will last five years (2017-2021) On January 1, 2017, Taco Taqueria, a Mexican restaurant, purchased equipment for $12,000 cash. Taco Taqueria estimates that the equipment will last five years (useful life). The restaurant expects to sell the equipment for $2,000 at the end of five years. Taco Taqueria prepares financial statements on an annual basis and has a December 31 year-end. a. Record the journal entry on January 1, 2017. b. What is the formula to calculate straight-line depreciation? Page 191 c. Using the straight-line depreciation method, calculate the annual depreciation for 2017 (Jan. 1 to Dec. 31 2017). d. In order to prepare the annual financial statements, record the adjusting journal entry for depreciation on December 31, 2017.