This question has two parts.

Penn Co. purchased machinery on January 1, 2016, for $450,000. The straight-line method is used and the useful life is estimated to be 5 years, with a $30,000 residual value.

At the beginning of 2019, Penn Co. spent $20,000 to overhaul the machinery. After the overhaul, Penn estimated that the useful life would be extended 2 years (7 years total), and the residual value would be $20,000.

Part 1

How much depreciation expense will Penn Co. record for 2019?

Part 2

How much is the book value of the machinery at December 31, 2019 (after adjusting entries are made)?