requirement 1

1. Prepare the journal entry (if any) to record depreciation expense for 2021.
2. The asset was not sold by December 31, 2021.

The fair value of the equipment on that date is $6,095,000. Prepare the journal entry (if any) necessary to record this increase in fair value. It is expected that the cost of disposal is still $23,000.

Presented below is information related to equipment owned by Vaughn Company at December 31, 2020. Assume that Vaughn will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 4 years