Prepare the journal entries related to disposal of machine a

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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.

Reference no: EM133175855

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