Question

Required information Problem 8-6A Disposal of plant assets LO C1, P1, P2 The following information applies to the questions displayed below.) Onslow Co. purchases a used machine for $192,000 cash on January 2 and readies it for use the next day at a $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 $23,040 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. Problem 8-6A Part 2 2. Prepare journal entries to record depreciation of the machine at December 31. Answer is complete but not entirely correct. No Date General Journal Credit Debit 29,760 Dec 31 Depreciation expense Machinery Accumulated depreciation Machinery 29,760 Dec 31 52,800 X Depreciation expense—Machinery Accumulated depreciation-Machinery 2.508 52.8 52,800 X

Answer 1

2) Journal entry

No	Date	General Journal	Debit	Credit
b	Dec 31	Depreciation expense	29760
		Accumulated depreciation-Machinery		29760

3a) Journal entry

No	Date	General Journal	Debit	Credit
a	Dec 31	Cash	23000
		Accumulated depreciation-Machinery (29760*5)	148800
		Loss on sale of machinery	29800
		Machinery		201600

3b) Journal entry

No	Date	General Journal	Debit	Credit
b	Dec 31	Cash	92000
		Accumulated depreciation-Machinery (29760*5)	148800
		Gain on sale of machinery		39200
		Machinery		201600

3c) Journal entry

No	Date	General Journal	Debit	Credit
c	Dec 31	Cash	33500
		Accumulated depreciation-Machinery (29760*5)	148800
		Loss on disposal of machinery	19300
		Machinery		201600