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On January $1,$ Year $1,$ Lex Co$.$ purchased equipment for $$90,000.$ In addition to the purchase

price, Lex paid $$6,000$ in sales tax, $$1,600$ in shipping costs, $$3,000$ in personnel training

costs, and $$2,400$ in installation costs. The equipment has an estimated salvage value of

$$10,000$ and a total estimated useful life of $10$ years. Lex uses the straight$-$line method of

depreciation and records depreciation expense annually.

On January $1,$ Year $2,$ the estimated useful life was revised to a total of $5$ years from the

date of purchase and the estimated salvage value was reduced to $$5,000.$ The change in

estimated useful life was a result of increased production.

The equipment was sold for $$55,000$ on July $1,$ Year $3.$ For the situations below, record the

appropriate journal entry.

To prepare each required journal entry:

Click on a cell in the Account Name column and select the appropriate account. An

account may be used once or not at all for a journal entry.

Enter the corresponding debit or credit amount in the associated column.

All amounts will be automatically rounded to the nearest dollar.

Not all rows in the table might be needed to complete each journal entry.

If no journal entry is needed, check the $"$No entry required" box at the top of the table

as your response.

Prepare the journal entry to record the depreciation expense for Year $2.$

No Entry RequiredNo Entry Required

Prepare the journal entry to record the Year $3$ sale and any necessary adjustments.

No Entry Required