Rayya Co. purchases and installs a machine on January 1, 2017, at a total cost o
ID: 2610100 • Letter: R
Question
Rayya Co. purchases and installs a machine on January 1, 2017, at a total cost of $142,800. Straight-line depreciation is taken each year for four years assuming a eight-year life and no salvage value The machine is disposed of on July 1, 2021, during its fifth year of service 3 Prepare entries to record the partial year's depreciation on July 1, 2021, and to record the disposal under the following separate assumptions: () The machine is sold for $71,400 cash. (2) An insurance settlement of $59,976 is received due to the machine's total destruction in a fire View transaction list View journal entry worksheet No Date General Journal Debit 1 July 01, 2021 Depreciation expense 71 400 2 mol 2021 Accumulated depreciation-Machinery Machinery 142 800 Gain on sale of machinery 3 July 01. 2021 Cash Loss on disposal of equipment 42.800 MachineryExplanation / Answer
Date
General description
Debit
Credit
Journal entry for recording partial depreciation in the year 2021
July 01 2021
Depreciation expense
8925
Accumulated depreciation - Machinery
8925
Notes:
cost of machine : 142,800
Life of machine : 8 years
Depreciation per annum : 142800/8 years
Depreciation for six Months : 17850 *6/12
Journal entry for recording the disposal:
Sold machinery for cash $71400
July 01 2021
Cash
71400
Accumulated depreciation - Machinery
80325
Gain on sale of Machinery (Bal fig)
8925
Machinery
142800
Notes:
Depreciation for four years : 17850*4
71400
Depreciation for Partial year 2021
8925
Accumulated depreciation
80325
An insurance settlement received due to machine total destruction on fire
July 01 2021
cash
59976
loss of fire (bal. figure)
2499
Accumulated depreciation
80325
Machinery
142800
Date
General description
Debit
Credit
Journal entry for recording partial depreciation in the year 2021
July 01 2021
Depreciation expense
8925
Accumulated depreciation - Machinery
8925
Notes:
cost of machine : 142,800
Life of machine : 8 years
Depreciation per annum : 142800/8 years
Depreciation for six Months : 17850 *6/12
Journal entry for recording the disposal:
Sold machinery for cash $71400
July 01 2021
Cash
71400
Accumulated depreciation - Machinery
80325
Gain on sale of Machinery (Bal fig)
8925
Machinery
142800
Notes:
Depreciation for four years : 17850*4
71400
Depreciation for Partial year 2021
8925
Accumulated depreciation
80325
An insurance settlement received due to machine total destruction on fire
July 01 2021
cash
59976
loss of fire (bal. figure)
2499
Accumulated depreciation
80325
Machinery
142800
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