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Problem 8-6A (Algo) Disposal of plant assets LO C1, P1, P2

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[The following information applies to the questions displayed below.] Onslow Company purchased a used machine for $288,000 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 $34,560 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 incurred

2. Prepare journal entries to record depreciation of the machine at December 31. 3. Prepare journal entries to record the machines disposal under each separate situation: (a) it is sold for $22,000 cash and (b) it is sold for $88,000 cash.