PB9-2 Recording and Interpreting the Disposal of Long-Lived Assets [LO 9-5] Duri

Question

PB9-2 Recording and Interpreting the Disposal of Long-Lived Assets [LO 9-5] During the current year, Rayon Corporation disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following: Accumulated Depreciation straight-line) Original Residual Estimated Asset MachineA 568.000 Machine B 15,000 Cost Value Life 6 years 4 years 528,050 (3 years) 5 11,900 2.300 6,350 (2 years) The machines were disposed of in the following ways: a. Machine A: Sold on January 2, for $42,600 cash. b. Machine B: On January 2, this machine suffered irreparable damage from an accident and was removed mmediately by a salvage company at no cost Required 1&2. Give the journal entries related to the disposal of Machine A and Machine B on January 2 of the current year. (f no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list 1 Record the current year depreciation for Machine A prior to disposa 2 Record the disposal of Machine A. 3 Record the current year depreciaon for Machine B prior to disposal 4 Record the disposal of Machine B Credit Note: journal entry has been entered

Explanation / Answer

2300

Date Account Debit credit 2 jan No entry is required as sold at the beginning of year jan 2 Cash 42600 Accumulated depreciation 28050 Gain on sale of machine A 2650 Machine A 68000 Jan 2 No entry is required Jan 2 cash

2300

Accumulated depreciation 6350 loss on sale of machine B 6350 Machine B 15000

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