City Taxi Service purchased a new auto to use as
City Taxi Service purchased a new auto to use as a taxi on January 1, 2016, for $36,000. In addition, City paid sales tax and title fees of $1,200 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $4,000.
Required
a. Using the straight-line method, compute the depreciation expense for 2016 and 2017.
b. Prepare the general journal entry to record the 2016 depreciation on sale of taxi in 2018.
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