Stay at Home Inc. purchased a machine on January 1st, 2018 for $88,000. The machine has no residual value and a 12 year useful life.

At the end of the first year, using straight line depreciation, what would depreciation expense be?

At the end of the second year, what would depreciation expense be?

At the start of the third year, the company revaluates its estimates and realizes the machine should have a $1,000 residual value and only has 8 years left.

At the end of the third year, what would depreciation expense be?

On January 1st, 2021, the company sells their machine to a customer for $60,000. Journalize the sale. (hint, only three years of depreciation have occurred)