During 2014, Ly Company disposed of two different assets. On January 1, 2014, prior to disposal of the assets, the accounts reflected the following:

The machines were disposed of in the following ways:
a. Machine A: Sold on January 1, 2014, for $5,750 cash.
b. Machine B: On January 1, 2014, this machine suffered irreparable damage from an accident and was removed immediately by a salvage company at no cost.
Required:
1. Give the journal entries related to the disposal of each machine at the beginning of 2014.
2. Explain the accounting rationale for the way that you recorded each disposal?

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Accumulated Depreciation (straight-line) Original Cost Residual Estimated Life Value $2,000 3,200 Asset $17,600 (4 years) 48,000 (12 years) Machine A Machine B $24,000 59,200 5 years 14 years