Prepare entries to record the partial year depreciation

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Rayya Co. purchases and installs a machine on January 1, 2017, at a total cost of $109,200. 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.

Problem 1: Prepare entries to record the partial year's depreciation on July 1, 2021, and to record the disposal under the following separate assumptions: (1) The machine is sold for $54,600 cash. (2) An insurance settlement of $45,864 is received due to the machine's total destruction in a fire.

Reference no: EM132953272

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