Ly Company disposed of two different assets. On January 1, prior to disposal of the assets, the accounts reflected the following:

Asset	Original Cost			Residual Value			Estimated Life	Accumulated Depreciation (straight-line)
Machine A	$	27,850		$	3,100		5 years	$	19,800	(4 years)
Machine B		72,000			3,750		15 years		59,150	(13 years)

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Item 4

Ly Company disposed of two different assets. On January 1, prior to disposal of the assets, the accounts reflected the following:

Asset	Original Cost			Residual Value			Estimated Life	Accumulated Depreciation (straight-line)
Machine A	$	27,850		$	3,100		5 years	$	19,800	(4 years)
Machine B		72,000			3,750		15 years		59,150	(13 years)

The machines were disposed of in the following ways:

Machine A: This machine was sold on January 1 for $7,180 cash.

Machine B: On January 1, this machine suffered irreparable damage from an accident and was removed immediately by a salvage company at no cost.

Required: 1. Prepare the journal entries related to the disposal of each machine at the beginning of the current year. Transaction a relates to the recording of the depreciation, and transaction b relates to the recording of the disposal of the machine. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Machine A - Jan. 1:

Journal entry worksheet

Record the entry for depreciation expense.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
a.

Journal entry worksheet

Record the entry for disposal of Machine A.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
b.

Machine B - January 1:

Journal entry worksheet

Record the entry for depreciation expense.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
a.

Journal entry worksheet

Record the entry for disposal of Machine B.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
b.