(1) On November 1, 2011, Love Company places a new asset into service. The cost of the asset is $27,000 with an estimated 5-year life and $3,000 salvage value at the end of its useful life. What is the depreciation expense for 2012 if Love Company uses the straight-line method of depreciation?

My answer was : 27000- 3000= 24000
24000 / 5 x 2/12 = 800
800 is the depr. Exp
(2) On January 1, a machine with a useful life of five years and a residual value of $5,000 was purchased for $25,000. What is the depreciation expense for year 1 under straight-line depreciation,

My answer is 25,000 - 5000 = 20,000
20,000 / 5 = 4000
4,000 is the depr. Exp

For number one your depreciation expense will be for one full year (2012), not the first year, which will be a partial year(2011).

Number 2 is correct.