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Disposal of fixed asset Equipment acquired on January 6 at a cost of $425,000 has an estimated useful lifo of 20 years and an estimatad residual yalue of $35,000. a. What was the annual amount of depreciotion for Years 1-3 using the straight-line method of depreciation? b. What was the book value of the equipment on January 1 of Year 4 ? 1 reedent TChear My won Asset cost minus residual value equals depreciable cost. Asset cost minus accumulated depreciatien equals beak value The Accumulated Oepreciation account is a permanent accoont and therefore the balance in the account grows each year of the asset's life. C. Assuming that the equipment was sold on January 3 of year 4 for $360,000, journalize the entry to record the sale. If an. January Fentares Compare the beok value amount to the Nale prich. If the book value is lew than the iale price, the assat was sold for a gain. If the beek value is more than the salo price, the equiproent was vold for a loss. Assuming that the equipment was sold on January 3 of Year 4 for $370,000 instead of $360,000, journalize the entry to ecord the sale. If an amount box does not require an entry, leave it blank. Januars Feedpack Creck My Weak Cimpare the book value amount to the sale price. If tho book value is less than the sale price, the asset was sold for a gain, If the bookvalue is mor e, than the wale peice, the equipinent was sold for a loss