7. A company purchased and installed machinery on January 1 at a total cost of $1,200,000. Straight-line depreciation was calculated based on the assumption of a 20-year life and a salvage value of $200,000. The machinery was disposed of on July 1 of year sixteen (16). The company uses the calendar year. A. Prepare the general journal entry to update depreciation to July 1 in year sixteen B. Prepare the general journal entry to record the sale of the machine under each of these three independent situations 1. The equipment was sold for $400,000 cash. IL The equipment was sold for $550,000 cash III The equipment was totally destroyed in a fire and the insurance company settled the claim for $420,000 cash