On 1 January 2018 Augusta Ltd paid $39,500 for a machine with a useful life of 10 years and a residual value of $1,500. The company uses a straight-line method to allocate depreciation expense. The machine was sold on 31 May 2020 for $8,000. Augusta Ltd has its year-end on 30 June.

Required

Prepare all necessary general journal entries to recognise the sale of the machine on 31 May 2020. Show all workings.