Ly Company disposed of two different assets. On January 1, prior to their dispos

Question

Ly Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following:

Machine B: On January 1, this machine suffered irreparable damage from an accident and was removed immediately by a salvage company at no cost.

Prepare the journal entry related to the disposal of Machine A and B at the beginning of the current year. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

First Journal Entry = Record the current year depreciation for Machine A prior to disposal.

Second Journal Entry= Machine A: Sold on January 1 for $9,000 cash. Record the transaction

Third Journal Entry= Record the current year depreciation for Machine B prior to disposal.

Last Journal Entry= Machine B: On January 1, this machine suffered irreparable damage from an accident and was removed immediately by a salvage company at no cost. Record the transaction.

Ly Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following:

Explanation / Answer

Journal Entries:

1)

Debit Depreciation $5400

Credit Accumulated Depreciation Machine A $5400

2)

Debit Cash $9000

Debit   Accumulated Depreciation Machine A $27000

Credit   Machine A $30000

Credit Income on sale of Machine A $6000

3)

Debit Depreciation $4000

Credit Accumulated Depreciation Machine B $4000

4)

Debit   Accumulated Depreciation Machine B $48000

Debit Loss on disposal of Machine B $11200

Credit   Machine B $59200

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