Reference no: EM132420571

Semester at Sea Cruise Lines has a 12/31 year end. The Company disposed of three different assets in 2018. The company uses straight-line depreciation and has provided the following information as of January 1, 2018, prior to the assets' disposal:

Asset. Original Cost Residual Value Estimated Life(years) Purchase Date

Air-conditioning unit/ $2,000 $150 5 Jan. 1, 2014

Beverage carts/ $8,450. $1,000 10 Jan. 1, 2014

Cruise ship/ $8,300,000 $850,000 25 Jan. 1, 2004

The machines were disposed of in the following ways:

A) An air-conditioning unit was sold on January 1, 2018 for $400 cash.

B) On January 1, a set of beverage carts sustained water damage from an accident and a salvage company removed the carts at no cost.

C) The company sold the cruise ship on December 31, 2018, for $4,500,000 receiving $1,450,000 in cash, with the remainder in an interest-bearing (8%) note receivable due at the end of 12 months.

Required:

Provide journal entries to record the transactions during 2018 for the three assets. Show all work and supporting calculations to support your journal entries. Be sure to label all amounts.