A farm purchased a new tractor for $30,000. They estimated thetractor would have a useful life of 5 years and would have asalvage value of $5,000. The farm uses the straight-line method andthe half-year convention. The farm sold the tractor during year 3for $19,000.
1. Compute the amount of depreciation expense to be taken inyears 1, 2 and 3
Year 1
Year 2
Year 3
2. Prepare a journal entry to record the sale of the tractor inyear 3.
