Onslow Co. purchased a used machine for $240,000 cash on January 2. On January 3, Onslow paid $6,000 to wire electricity to the machine and an additional $1,200 to secure it in place. The machine will be used for six years and have a $28,800 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of.

3. Prepare journal entries to record the machines disposal under each separate situation: (a) it is sold for $24,500 cash; (b) it is sold for $98,000 cash; and (c) it is destroyed in a fire and the insurance company pays $35,000 cash to settle the loss claim.

Entry #1 prepare the sale of the used machine for 24,500 cash.

Entry #2 record the same of the used machine for 98,000 cash.

Entry #3 record the insurance settlement received of 35,000 resulting from the total destruction of the machine in the fire.