Onslow Co. purchased a used machine for $192,000 cash on January 2. On January 3, Onslow paid $8,000 to wire electricity to the machine and an additional $1,600 to secure it in place. The machine will be used for six years and have a $23,040 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of.

a.) Prepare journal entries to record the machine's purchase and the costs to ready it for use. Cash is paid for all costs incurred.

(Jan 02-Record the purchase of a used machine for $192,000 cash., Jan 03-Record the costs of $8,000 incurred on the used machine., Jan 03-Record the cost of $1,600 for an operating platform.)

b.) Prepare journal entries to record depreciation of the machine at December 31.

(Dec 31-Record the first year year-end adjusting entry for the depreciation expense of the used machine. Dec 31-Record the year of disposal year-end adjusting entry for the depreciation expense of the used machine.)

c.) Prepare journal entries to record the machines disposal under each separate situation: (a) it is sold for $24,000 cash; (b) it is sold for $96,000 cash; and (c) it is destroyed in a fire and the insurance company pays $34,500 cash to settle the loss claim.

(Dec 31-Record the sale of the used machine for $24,000 cash., Dec 31-Record the sale of the used machine for $96,000 cash., Dec 31-Record the insurance settlement received of $34,500 resulting from the total destruction of the machine in a fire.)