State depreciation is to be charged on a straight-line basis

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Reference no: EM13219033

Saturn Co. purchases a used machine for $288,000 cash on January 2 and readies it for use the next day at an $8,000 cost. On January 3, it is installed on a required operating platform costing $1,600, and it is further readied for operations. The company predicts the machine will be used for six years and have a $34,560 salvage value. Depreciation is to be charged on a straight-line basis. On December 31, at the end of its fifth year in operations, it is disposed of.

Prepare journal entries to record depreciation of the machine at December 31.

(a) Its first year in operations.

(b) The year of its disposal.

Reference no: EM13219033

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