The following information applies to the questions displayed below.J During the current year, Merkley Company disposed of three cifferent assets. On January 1 of the current year, prior to their disposal, the accounts reflected the following Accumulated Depreclation (straight line) $ Residual Estimated Original Cost Asset Value Life $ 57,000 76,300 12 years ,000 8 years 5,400 16 years Machine A 39()(0 3,000 30,000(10 years) 39,750 (6 years) 53175 (12 years) Machine B Machine C The machines were disposed of in the following ways a. Machine A: Sold on January 1 for $8,400 cash. b. Machine B: Sold on December 31 for $11.125; received cash, $2,100, and a $9,025 interest-bearing (12 percent) note receivable due at the end of 12 months c. Machine C: On January 1, this machine suffered irreparable damage from an accident. On January 10, a salvage company removed the machine at no cost. Required: 1. Give all journal entries related to the disposal of each machine in the current year. (If no entry is required for a transactionlevent, select "No journal entry required" in the first account field.) a. Machine A View transaction list Journal entry worksheet Record the disposal of Machine A Note: Enter debits before credits. Credit Transaction General Journal Debit b. Machine B. View transaction list Journal entry worksheet 2 Record the depreciation of Machine B. Note: Enter debits before credits. Debit Credit Transaction General Journa Record entry View general journal Clear entry c. Machine C View transaction list Journal entry worksheet Record the disposal of Machine C Note: Enter debits before credits. Debit Transaction Credit General Journal Record entry Clear entry View general journal 10.00 points 2. Explain the accounting rationale for the way that you recorded each disposal Machine A: Disposal of a long-lived asset with the price below net book value results in a Machine B: Disposal of a long-lived asset with the price above net book value results in a Machine C: Disposal of a long-lived asset due to damage results in a remaining book value
