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A company purchases equipment for $500,000 that it expects to use for 8 years before...

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Accounting

A company purchases equipment for $500,000 that it expects to use for 8 years before salvaging for $20,000. The company uses straight-line. Select the most correct statement: a. The book value will be $420,000 at the End Of Year 1 b. If the company sold the asset at the EOY2 for $390,000, theyd recognize a gain c. At EOY3, Accumulated Depreciation would have a credit balance of $240,000

Why is the answer B? Please explain!

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