The Coca-Cola Company’s annual report for the year ended December 31, 2011, included the following ($ in millions):

Property, plant, and equipment ......$ 23,151

Less: Accumulated depreciation ....      8,212

                                                               $ 14,939

Assume that on January 1, 2012, Coca-Cola acquired some new bottling equipment for $1.6 million cash. The equipment had an expected useful life of 4 years and an expected residual value of $400,000. Coca-Cola uses straight-line depreciation.

1. Prepare the journal entry that Coca-Cola would make annually for depreciation on the new equipment.

2. Suppose Coca-Cola sold some of the equipment it had purchased on January 1, 2012. The equipment being sold had an original cost of $80,000 and an expected residual value of $15,000. Coca-Cola sold the equipment for $42,000 cash 2 years after the purchase date. Prepare the journal entry for the sale.

3. Refer to requirement 2. Suppose Coca-Cola had sold the equipment for $51,000 cash, instead of $42,000. Prepare the journal entry for the sale.