Schulz Ltd. purchased a machine in 2017 for $65,000. In late 2020, the company made a plan to dispose of the machine. At that time, the accumulated depreciation was $25,000 and the estimated fair value was $35,000. Estimated selling costs were $1,000. Assume that the asset qualifies as a held for sale asset at December 31, 2020.

Required:

a. Prepare the journal entry required at December 31, 2020.

b. On March 3, 2021, the asset is sold for $37,000. Prepare the journal entry to record the sale.

c. Repeat parts

(a) and

(b) assuming that the estimated fair value on December 31, 2020, was $45,000 instead of $35,000.