Disposal of Fixed AssetEquipment acquired on January 6 at a cost of $401,300 has an estimated useful life of 18 years and an estimated residual value of $25,100.a. What was the annual amount of depreciation for Years 1–3 using the straight-line method of depreciation?YearDepreciation ExpenseYear 1$Year 2$Year 3$b. What was the book value of the equipment on January 1 of Year 4?$ c. Assuming that the equipment was sold on January 3 of Year 4 for $329,500, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.
Year 4
Jan. 3 Cash
Accumulated Depreciation-Equipment
Loss on Sale of Equipment
Equipment
d. Assuming that the equipment had been sold on January 3 of Year 4 for $342,000 instead of $315,000, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.
Cash
Accumulated Depreciation-Equipment
Equipment
Gain on Sale of Equipment