XXX is in the machine job shop business. Its owns a lathe that was purchased 4 years ago for $75,000 and was being depreciated over 5 years using straight line deprecation with out taking salvage value into consideration. Domco wants to sell the lathe to make room for a new one and has asked a machine tool dealer to make an offer to purchase the lathe.

Required:

a. Assume the machine tool dealer offered the company $18,000 in cash for lathe and the company accepted the offer. Make the required journal entry record the sale of the lathe.

b. Assume the machine tool dealer offered the company $13,000 in cash for lathe and the company accepted the offer. Make the required journal entry record the sale of the lathe.