Finally, our equipment is fixed! However, we have a more updated Bobcat we found that appears to be in newer condition, and we decide to sell this one to upgrade. We manage to sell our current one for $10,000 out the door on December 31, 2022. We are assuming we used straight-line depreciation for this entry. Record the journal entry/entries for the sale of our asset. Be sure to include any depreciation adjustments if necessary, and also the gain or loss on the sale. Background: Since we have now extended the life of our asset, we need to recalculate our depreciation. Keep in mind we still have not put any miles on the equipment yet this year. Recalculate the depreciation for Straight-line depreciation method. *Tip: Keep in mind, the improvement in 2022 took place on Oct 31 so we are calculating partial year depreciation for 2 different amounts. Background: We own a swimming pool business and install high-end specialty inground pools for homeowners. We have purchased the following: Used 2014 Bobcat Skidsteer Loader on 01/01/2019 for $35,000. It had 1392 hours on it when we purchased it, and carried a blue book value on it of $41,000 at that time. The life-expectancy for it is about 100,000 hours total or about 4 years as of the date we purchased it. In 2019 we put 945 hours on it. 2020 we had 1178 hours. 2021 we had 1424 hours. 2022 it refused to start up for us when we began the work season, and we did not have time to fix it, so it sat while we paid to lease equipment. We anticipate it will be worth $2,500 when we are ready to replace it. Our Bobcat broke down on us in 2022. We wound up leasing another one for the season. The lease was for $2400 per month, and went from April 1 to September 30, 2022. Lease payments are paid on the 1st of each month, for that current month. Keep in mind, our equipment is still considered as "placed in service" since we still own it and do not intend to sell it. When work started to slow down October 1, 2022, we decided we were going to work on our Bobcat to try and get it running. We started with a basic oil change and tune-up. We spent $250.00 on this. We also decided to wash and wax our piece of equipment the next day, and spent another $50 on supplies to do this. After troubleshooting the basics with no luck, we realize that a belt needs replaced, which cost us another $350.00 on October 2. We also realize the transmission needs rebuilt. We spend $3,500 on a new transmission and paid the mechanic on October 31st, but think the new transmission will get us another 5 years and 100,000 miles on the bobcat. The total useful hours are 195,061 Since we have now extended the life of our asset, we need to recalculate our depreciation. Keep in mind we still have not put any miles on the equipment yet this year. Recalculate the depreciation using Units of Activity *Tip: Keep in mind, the improvement in 2022 took place on Oct 31 so we are calculating partial year depreciation for 2 different amounts.