Exercise 10-18 Partial-year depreciation; disposal of plant asset P2 Rayya Co. purchases a machine for $105,000 on January 1, 2021. Straight-line depreciation is taken each year for four years assuming a seven-year life and no salvage value. The machine is sold on July 1, 2025, during its fifth year of service. Prepare entries to record the partial year's depreciation on July 1, 2025, and to record the sale under each separate situation. 1. The machine is sold for $45,500 cash. 2. The machine is sold for $25,000 cash. Problem 10-6A Disposal of plant assets C1 P1 P2 Onslow Co. purchased a used page 385 machine for $178,000 cash on January 2. On January 3, Onslow paid $2,840 to wire electricity to the machine. Onslow paid an additional $1,160 on January 4 to secure the machine for operation. The machine will be used for six years and have a $14,000 salvage value. Straight-line depreciation is used. On December 31 , at the end of its fifth year in operations, it is disposed of. Required 1. Prepare journal entries to record the machine's purchase and the costs to ready it for use. Cash is paid for all costs incurred. 2. Prepare journal entries to record depreciation of the machine at December 31 of (a) its first year of operations and (b) the year of its disposal. 3. Prepare journal entries to record the machine's disposal under each separate situation: (a) it is sold for $15,000 cash and (b) it is sold for $50,000 cash. Check (2b) Depr. Exp., $28,000