During 2015, the Merkley Company disposed of three different assets. On January 1, 2015, prior to their disposal, the accounts reflected the following:

Asset	Original Cost	Residual Value	Estimated Life	Accum. Depreciation (Straight line)
Machine A	$21,000	$3,000	8 years	$15,750 (7 years)
Machine B	$50,000	$4,000	10 years	$36,800 (8 years)
Machine C	$85,000	$5,000	15 years	$64,000 (12 years)

The machines were disposed of in the following ways:

a. Machine A: Sold on January 1, 2015, for $5,000 cash.

b. Machine B: Sold on December 31, 2015, for $10,500; received cash, $2,500, and a $8,000 interest-bearing (12 percent) note receivable due at the end of 12 months.

c. Machine C: On January 1, 2015, this machine suffered irreparable damage from an accident. On January 10, 2015, a salvage company removed the machine at no cost.

Required:

1. Give all journal entries related to the disposal of each machine in 2015.

2. Explain the accounting rationale for the way that you recorded each disposal.