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Question - During the current year, Rayon Corporation disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following:
Asset
Original Cost
Residual Value
Estimated Life
Accumulated Depreciation (straight-line)
Machine A
$63,000
$11,300
6 years
$25,850 (3 years)
Machine B
14,500
2,150
5 years
7,410 (3 years)
The machines were disposed of in the following ways:
1. Machine A: Sold on January 2, for $39,000 cash.
2. Machine B: On January 2, this machine was scrapped with zero proceeds (and zero cost of removal).
Required - Prepare the journal entries related to the disposal of Machine A and Machine B on January 2 of the current year.
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