On June 6, 2020, Lindhardt Chocolates Ltd. purchased assembly line equipment for $426,000. Lindhardt’s management estimated that the equipment had a useful life of four years and an estimated residual value of $30,000. Lindhardt uses the straight-line method of depreciation and has a December 31 year end. On June 21, 2022, the machine was sold for $174,000.

Required

a. Prepare the journal entry to record the acquisition of the equipment.

b. Assuming that the depreciation was correctly calculated and recorded in 2020 and 2021, prepare the journal entries to update the depreciation and record the sale of the equipment on June 21, 2022.

c. Assuming instead that the company used the double-diminishing-balance method to depreciate the cost of the equipment:

i. What amount of depreciation would be recorded in 2020 and 2021? 

ii. What journal entries would be required to update the depreciation and record the sale of the equipment on June 21, 2022?