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Question 2 ( 2 5 marks ) On July 7 , Year 1 , AAA Trucking bought a forklift for $ 4 2 , 0

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Question 2(25 marks)
On July 7, Year 1, AAA Trucking bought a forklift for $42,000 cash. The estimated residual value is $6,000, and estimated life is 8 years. AAA Trucking has a December 31 year end.
On September 19, Year 1, AAA Trucking purchased office equipment for $70,000. The estimated residual value is $10,000, and estimated life is 10 years.
On November 4, Year 1, AAA Trucking purchased a customer list from a competitor for $12,000. This is an intangible asset that will be amortized over 3 years.
AAA Trucking uses days for year 1 when calculating amortization.
Required
a. Assume AAA Trucking uses straight-line depreciation. Prepare the journal entry to record amortization expense for Year 1. Provide a separate entry for each of the three assets.
b. Assume AAA Trucking uses the double-declining balance method. Prepare the journal entry to record amortization expense for the forklift and the office equipment for Year 3 and Year 4. Provide a separate entry for each asset.
Note: Please leave one empty row between each journal entry.
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