Problem 8-6B Disposal of plant assets CI P1 P2 On January 1, Walker purchased a used machine for $150,000. On January 4. Walker paid $3,510 to wire electricity to the machine. Walker paid an additional $4,600 on January 5 to secure the machine for operation. The machine will be used for seven years and have an $18,110 salvage value. Straight-line depreciation is used. On December 31, at the end of its sixth year of use, the machine is disposed of 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 of (@) its first year of operations and (b) the year of its disposal. Check (2) Depr. Exp., $20,000 3. Prepare journal entries to record the machine's disposal under each separate situation: (a) it is sold for $28,000 cash and (b) it is sold for $52,000 cash. Depreciation Cost of Machine Setup Platform Total Cost deprec year number of years accumm depr yr 5 Loss on 3a BV given up Cash received Loss on disposal book value end years 3b BV given up Cash received Gain on disposal 3c BV given up Cash received Les on disposal