During the current year, Merkley Company disposed of three different assets. On January 1 of the current year, prior to the disposal of the assets, the accounts reflected the following: Asset Machine A Machine B Machine C Original Cost $ 42,000 73,000 76,100 Residual Value $ 3,000 4,000 6,400 Estimated Life 10 years 8 years 17 years Accumulated Depreciation (straight line) $31,200 (8 years) 51,750 (6 years) 49,200 (12 years) The machines were disposed of during the current year in the following ways: a. Machine A: Sold on January 1 for $10,400 cash. b. Machine B: Sold on December 31 for $13,325; received cash, $2,100, and a $11,225 interest-bearing (12 percent) note receivable due at the end of 12 months. c. Machine C: On January 1, this machine suffered irreparable damage from an accident. On January 10, a salvage company removed the machine at no cost. Required: 1. Give all journal entries related to the disposal of each machine in the current year. a. Machine A. b. Machine B. c. Machine C. 2. Explain the accounting rationale for the way that you recorded each disposal. Machine A: Disposal of a long-lived asset with the price below net book value results in a Machine B: Disposal of a long-lived asset with the price above net book value results in a Machine C: Disposal of a long-lived asset due to damage results in a remaining book value