On January 1, Walker purchases a used machine for $150,000 and readies it for use the next day at a cost Problem 8-6B of $3,510. On January 4, it is mounted on a required operating platform costing $4,600, and it is further Disposal of plant assets readied for operations. Management estimates the machine will be used for seven years and have an c1 P1 P2 $18,110 salvage value. Depreciation is to be charged on a straight-line basis. On December 31, at the end of its sixth year of use, the machine is disposed of. Required 1. Prepare journal entries to record the machine's purchase and the costs to ready and install it. Cash is paid for all costs incurred. operations and (b) the year of its disposal. tions: (a) it is sold for $28.000 cash: (b) it is sold for $52.000 cash; and (c) it is destroyed in a fire and 2. Prepare journal entries to record depreciation of the machine at December 31 of (a) its first year in Check $20.000 (2b) Depr Exp. 3. Prepare journal entries to record the machine's disposal under each of the following separate assump- (3c) Dr Loss from Fire, $13,110 the insurance company pays $25.000 cash to settle the loss claim