Hattie Corporation recently decided to dispose of a significant portion of its plant assets. The assets to be held for disposal are summarized here: (Click the icon to view the assets to be held for disposal) When the assets were held for disposal, the following changes in fair value occurred Click the icon to view the changes in fair value.) At the time the decision was made to dispose of the assets, the book values of the assets approximated their fair values. Assume that costs to sell the assets are zero Requirement Prepare any journal entries necessary to account for the changes in fair value for Years 1 and 2. (Record debits firs then credits. Exclude explanations from any joumal entries.) Begin by recording the journal entry to reclassify the machinery held for sale Date of Decision to Dispose Account Next, record the journal entry to reclassify the equipment held for sale Account Date of Decision to Dispose Now, record the journal entry for the gain or loss on machinery at the end of year 1. Account End of Year 1 cision se X Assets to be held for disposal Description Machinery Equipment** Cost $ 696,000 $ 1,550,000 Accumulated depreciation (348,000) (620.000) $ 348,000 $ 930,000 Net book value at year end *Machinery is depreciated by the straight-line method, assuming a 6-year life with no scrap value. The asset was acquired 3 years ago. **Equipment is depreciated by the straight-line method, assuming a 10-year life with no scrap value. The asset was acquired 4 years ago. Print Done Changes in fair value Subsequent Year Machinery Equipment End of Year 1 fair value 200.000 $ 900.000 End of Year 2 fair value 95 215 000 $ 950.000 Print Done