Problem:
Sam's Subs purchased a delivery van on January 1, 2013, for $35,000. In addition, Sam's paid sales tax and title fee's of $1,500 for the van. The van is expected to have a four year life and a salvage value of $6,500.
Required:
Question 1: Using the straight-line method, compute the depreciation expense for 2013 and 2014.
Question 2: Prepare the general journal entry to record the 2013 depreciation.
Question 3: Assume the van was sold on January 1, 2016 for $21,000. Prepare the journal entry for the sale of the van in 2016.
Note: Please show how to work it out.