1.On January 1^st, 2018, Phonetic Company purchased machinery costing $146,000 and incurred $5,000 in installation costs.The machinery has an estimated useful life of 15 years and a residual value of $10,000.The company uses the straight-line method of depreciation. At the end of 2019, Phonetic recorded depreciation and assessed the asset, determining a recoverable amount of $127,000.Phonetic sold the equipment to Voilex Corporation on June 30^th, 2020, for $130,000.

Required:

1.Prepare the necessary entry required by Phonetic to record the purchase of the Machine on January 1^st, 2018.

2.Prepare the necessary entries for Phonetic on December 31^st, 2019.

^3.Prepare the compound entry required for the sale of the Machinery on June 30^th, 2020.