A company purchased and installed equipment on January 1 at a total cost of $72,000. Straight-line depreciation was calculated based on the assumption of a five-year life and no salvage value. The equipment was disposed of on July 1 of the fourth year. The company uses the calendar year.

1.Prepare the general journal entry to update depreciation to July 1 in the fourth year.

2.Prepare the general journal entry to record the disposal of the equipment under each of these three independent situations:

3.The equipment was sold for $22,000 cash.

4.The equipment was sold for $15,000 cash.

5.The equipment was totally destroyed in a fire and the insurance company settled the claim for $18,000 cash.