PA9-2 Recording and Interpreting the Disposal of Long-Lived Assets [LO 9-5]

PA9-2 Recording and Interpreting the Disposal of Long-Lived Assets [LO 9-5] Ly Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following: Accumulated Estimated Life Original Residual Depreciation (straight-line) $21,600 (4 years) 44,000 (11 years) Value Asset Cost $30,000 59,200 Machine A $3,000 3,200 5 years 14 years Machine B The machines were disposed of in the following ways: a. Machine A: Sold on January 1 for $9,000 cash b. Machine B: On January 1, this machine was sold to a salvage company at zero proceeds (and zero cost of removal). Required: 1. & 2. Prepare the journal entries related to the disposal of Machine A and B at the beginning of the current year. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Journal entry worksheet 1 2 3 4 Record the current year depreciation for Machine A prior to disposal Note: Enter debits before credits. Date General Journal Debit Credit January 01 View general journal Clear entry Record entry Journal entry worksheet 1 2 3 4 Machine A: Sold on January 1 for $9,000 cash. Record the transaction Note: Enter debits before credits. Date General Journal Debit Credit January 01 Record entry Clear entry View general journal Journal entry worksheet 1 2 4 Record the current year depreciation for Machine B prior to disposal Note: Enter debits before credits. Date General Journal Debit Credit January 01 Record entry Clear entry View general journal Journal entry worksheet 2 1 4 Machine B: On January 1, this machine suffered irreparable damage from an accident and was removed immediately by a salvage company at no cost Record the transaction Note: Enter debits before credits. Date General Journal Debit Credit January 01 Record entry View general journal Clear entry