On January 2, Bering Co. disposes of a machine costing $43,800 with accumulated depreciation of $23,595. Prepare the entries to record the disposal under each separate situation.

1. The machine is sold for $16,946 cash.
2. The machine is traded in for a new machine having a $60,300 cash price. A $20,857 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance.
3. The machine is traded in for a new machine having a $60,300 cash price. A $15,643 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance.

The machine is traded in for a new machine having a $60,300 cash price. A $20,857 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance. No Date General Journal Debit Credit 1 Jan 02 60,300 20,857 X Machinery (new) Accumulated depreciationMachinery (old) Gain on exchange of machinery Machinery (old) Cash 43,800 X 39,443 The machine is traded in for a new machine having a $60,300 cash price. A $15,643 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance. No Date General Journal Debit Credit 1 Jan 02 60,300 Machinery (new) Loss on exchange of machinery Accumulated depreciation-Machinery (old) Machinery (old) Cash 3