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City Taxi Service purchased a new auto to use as a taxi on January 1,...

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Accounting

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City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $27,200. In addition, City paid sales tax and title fees of $990 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $5,630. Required a. Using the straight-line method, compute the depreciation expense for Year 1 and Year 2. b&c. Assume that the taxi was sold on January 1, Year 3, for $22,041. Prepare the general journal entries to record the Year 1 depreciation and sale of the taxi in Year 3. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req A Req B and C Assume that the taxi was sold on January 1, Year 3, for $22,041. Prepare the general journal entries to record the Year 1 depreciation and sale of the taxi in Year 3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Date General Journal Credit Debit 4,512 Year 1 Depreciation expense Accumulated depreciation 4,512 Year 3 9,024 22,041 Accumulated depreciation Cash Gain on sale Taxi 6,149 X 28,190 ( Req A ReqB and c )

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