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During the current year, the Bobby Knight Company disposed of three different assets. On January 1 of the current year, prior to their disposal, the

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

Asset Original Cost Residual Value Estimated Life Accumulated Depreciation (straight line)
Machine A $ 33,000 $ 3,000 8 years $ 22,500 (6 years)
Machine B 53,000 4,000 8 years 36,750 (6 years)
Machine C 75,500 6,600 17 years 48,635 (12 years)

The machines were disposed of in the following ways:

a. Machine A: Sold on January 1 for $9,900 cash.

b. Machine B: Sold on December 31 for $10,825; received cash, $2,100, and a $8,725 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.

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1. Give all journal entries related to the disposal of each machine in the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

a. Machine A

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b. Machine B

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c. Machine C.

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

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Record the disposal of Machine A Note: Enter debits before credits. Transaction General Journal Debit Credit

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