Question $2$

Milk Company bought a machine on $1$ January $2019$ for $$5,000,000$ cash. The machine has an estimated useful life of $10$ years with no residual value. The company uses straight$-$line depreciation method, cost model for all its PPE and its balance day is $31$ December.

At December $31,2020,$ the performance of the asset was not as expected, producing less milk than the original amount predicted. After some calculations, it was estimated that the fair value less cost to sell the machine would be $$3,900,000$ and the value in use of the machine would be $$3,700,000.$

At December $31,2021,$ the fair value less cost to sell the machine is $$3,350,000$ and the present value of expected future cash flow on the machine is $$3,412,500.$ The recoverable amount of the machine at December $31,2022,$ is estimated to be $$2,975,000.$

On $30$ September $2023,$ Milk Company decided to donate the machine to the Dunedin City Council for future fundraising. The fair value of the machine was estimated to be $$2,800,000$ at the time of the donation.

Required

Prepare the necessary journal entries to record the above transactions.