Aerospace Manufacturing recently replaced a piece of machinery at a net price of $$4,000,$

f$.$o$.$b$.$ destination. The replacement was necessary because the machine burned out

making it inoperable. Therefore, the machine had no resale value and had to be scrapped.

Aerospace's insurance policy provided for a replacement of the machine and paid the cost

of the new machine directly to the manufacturer, less the deductible amount Aerospace

paid to the manufacturer. The $$4,000$ that Aerospace paid was the amount of the

deductible that it has to pay on any single claim on its insurance policy. The new machine

represents the same value in use to Aerospace.

The old machine originally cost $$70,000.$ It's book value was $$40,000$ at the time of the

burn out and had a market value of $$50,800$ before the burn out, based on recent

transactions involving similar machinery. Freight and installation charges for the new

machine cost Aerospace an additional $$1,100$ cash.

Required

a$)$ Prepare the general journal entry to record the transaction to replace the machinery

that was burned out.

b$)$ Repeat part $($a$),$ but assume that the new machine will result in significant savings to

Aerospace, since the new machine is more efficient and requires less operating time.