Reference no: EM133901620

Problem

Scroll down to complete all parts of this task. 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. Get the instant assignment help.

I. Prepare the journal entry to record the depreciation expense for Year 2.
II. Prepare the journal entry to record the Year 3.