Question

Chec Required information The following information applies to the questions displayed below.) Onslow Co. purchased a used machine for $192,000 cash on January 2. On January 3. Onslow paid $8.000 to wire electricity to the machine and an additional $1.600 to secure it in place. The machine will be used for six years and have a $23,040 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of 3. Prepare journal entries to record the machine's disposal under each separate situation: (a) it is sold for $22.000 cash: (b) it is sold for $88,000 cash; and (it is destroyed in a fire and the insurance company pays $32.500 cash to settle the loss claim View transaction list Journal entry worksheet 2 3 Record the sale of the used machine for $22,000 cash. Note: Enter debits before credits General Journal Debit Credit Date Dec 31 < Prev 1 of g ! Next >

Answer 1

Date	General Journal	Debit	Credit
Dec 31	Cash	$22,000
	Accumulated Depreciation ($29,760 x 5 years )	$148,800
	Loss on sale of machinery	$30,800
	Machinery		$201,600
Dec 31	Cash	$88,000
	Accumulated Depreciation	$148,800
	Machinery		$201,600
	Gain on sale of machinery		$35,200
Dec 31	Cash a/c	$32,500
	Accumulated Depreciation	$148,800
	Loss in fire	$20,300
	Machinery		$201,600
Working
Tota Machine Cost = $192,000 + $8,000 + $1,600 = $201,600
Cost	$201,600		201600
Salvage Value	$23,040
Depreciable	$178,560
Life	6 years
Dep. Per year	$29,760