Prepare the necessary journal entries required to update

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Problem 1: Solar Company purchased equipment for $27,000 on 1 July 20X1. Company depreciated the equipment over a five-year life by the 150%-declining-balance method on monthly basis and its residual value was $3,000. Until the end of the second year at 31 December 20X2, the Company sold the equipment for $12,500. Assuming the Company adjusts its accounts annually, prepare the necessary journal entries required to update the depreciation for the second year and to dispose the said equipment.

Reference no: EM132696315

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