Events related to the acquisition, use, and disposal of a tangible plant asset: straight-line depreciation.
CJ's Pizza purchased a delivery van on January 1, 2011, for $25,000. In addition, CJ's paid sales tax and title fees of $1,000 for the van. The van is expected to have a four-year life and a salvage value of $6,000.
a. Using the straight-line method, compute the depreciation expense for 2011 and 2012.
b. Prepare the general journal entry to record the 2011 depreciation.
c. Assume the van was sold on January 1, 2014, for $12,000. Prepare the journal entry for the sale of the van in 2014.