MSN Company owns an old machine that cost $60,000, has annual depreciation expense of $12,000, and has accumulated depreciation of $30,000 on December 31, 2020. On March 31, 2021, when the machine has a fair value of $24,000, it was exchanged for a similar machine that worth $72,000 and the proper amount of cash is paid. The exchange lacks commercial substance.

Required: Prepare the necessary journal entries on March 31, 2021.

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