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During the current year, Martinez Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following: Asset Original

During the current year, Martinez Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following:

Asset Original Cost Residual Value Estimated Life Accumulated Depreciation (straight-line)
Machine A $ 77,700 $ 4,600 15 years $ 63,353 (13 years)
Machine B 21,500 2,300 8 years 14,400 (6 years)

The machines were disposed of in the following ways:

  1. Machine A: Sold on January 2 for $21,500 cash.
  2. Machine B: On January 2, this machine was sold to a salvage company at zero proceeds (and zero cost of removal).

Required:

  1. 1. & 2. Prepare the journal entries related to the disposal of Machine A and B on January 2 of the current year. TIP: When no cash is received on disposal, the loss on disposal will equal the book value of the asset at the time of disposal. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

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