3. Mercury Inc. purchased equipment in 2019 at a cost of $497,000. The equipment was expected to produce 580,000 units over the next five years and have a residual value of $33,000. The equipment was sold for $253,600 part way through 2021. Actual production in each year was: 2019 = 83,000 units; 2020 = 133,000 units; 2021 = 67,000 units. Mercury uses units-of-production depreciation, and all depreciation has been recorded through the disposal date. Required: 1. Calculate the gain or loss on the sale. 2. Prepare the journal entry to record the sale. 3. Assuming that the equipment was instead sold for $280,000, calculate the gain or loss on the sale. 4. Prepare the journal entry to record the sale in requirement 3.

4. National Orthopedics Co. issued 9% bonds, dated January 1, with a face amount of $600,000 on January 1, 2021. The bonds mature on December 31, 2024 (4 years). For bonds of similar risk and maturity the market yield was 10%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price of the bonds at January 1, 2021. 2. Prepare the journal entry to record their issuance by National on January 1, 2021. 3. Prepare an amortization schedule that determines interest at the effective rate each period. 4. Prepare the journal entry to record interest on June 30, 2021. 5. Prepare the appropriate journal entries at maturity on December 31, 2024.