On December 31, 2019, Windsor Inc. owns a machine with a carrying amount of $990,000. The original cost and accumulated depreciation for the machine on this date are as follows: Machine Accumulated depreciation $1,350,000 360,000 $990,000 Depreciation is calculated at $60,000 per year on a straight-line basis. A set of independent situations follows. For each situation, prepare the journal entry for Windsor Inc. to record the transaction. Ensure that depreciation entries are recorded to update the machine's carrying amount before its disposal. Assume that Windsor Inc. uses IFRS for financial statement purposes. A fire completely destroyed the machine on August 31, 2020. An insurance settlement of $423,000 was received for this casualty. Assume the settlement was received immediately. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit August 31, 2020 (To record depreciation on machinery) August 31, 2020 (To record disposal of machinery) On April 1, 2020, Windsor sold the machine for $1,051,000 to Wildhorse Company. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit April 1, 2020 (To record depreciation on machinery) April 1, 2020 (To record disposal of machinery) On July 31, 2020, the company donated the machine to the Dartmouth City Council. The machine's fair value at the time of the donation was estimated to be $1.6 million. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry"for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit July 31, 2020 (To record depreciation on machinery) July 31, 2020 (To record disposal of machinery)
