Required information Problem 8-6A (Algo) Disposal of plant assets LO C1, P1, P2 [The following information applies to the questions displayed below.] Onslow Company purchased a used machine for $192,000 cash on January 2 , On January 3, Onslow paid $8,000 to wire electricity to the machine. Onslow paid an additional $1,600 on January 4 to secure the machine for operation. 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. Problem 8-6A (Algo) Part 1 Required: 1. Prepare journal entries to record the machine's purchase and the costs to ready it for use. Cash is paid for all costs incurted. 1 Record the purchase of a used machine for $192,000 cash. 2. Record the costs of $8,000 incurred on the used machine. 3 Record the cost of $1,600 for an operating platiorm. Required information Problem 8-6A (Algo) Disposal of plant assets LO C1, P1, P2 [The following information applies to the questions displayed below] Onslow Company purchased a used machine for $192,000 cash on January 2, On January 3, Onslow paid $8,000 to wire electricity to the machine. Onslow paid an additional $1,600 on January 4 to secure the machine for operation. 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 Problem 8-6A (Algo) Part 2 2. Prepare journal entries to record depreciation of the machine at December 31 1 Record the first year year-end adfusting entry for the depreciation expense of the used machine. 2. Record the year of disposal year-end adjusting entry for the depreciation pxpense of the used machine. Required information Problem 8-6A (Algo) Disposal of plant assets LO C1, P1, P2 [The following information applies to the questions displayed below] Onslow Company purchased a used machine for $192,000 cash on January 2 . On January 3, Onslow paid $8,000 to wire electricity to the machine, Onslow paid an additional $1,600 on January 4 to secure the machine for operation. 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 fith year in operations, it is disposed of. Problem 8-6A (Algo) Part 3 3. Prepare journal entries to record the machine's disposal under each separate situation: (a) it is sold for $20,500 cash and (b) it is sold for $82,000 cash. 1 Record the sale of the used machine for $20,500 cash. 2 Pecord the sale of the used machine for $82,000 cash
