You are engaged in the audit of the financial statements of Holman Corporation for the year ended December 31, 20X6. The accompanying analyses of the Property, Plant, and Equipment and related accumulated depreciation accounts have been prepared by the chief accountant of the client. You have traced the beginning balances to your prior year's audit working papers. "Final HOLMAN CORPORATION Analysis of Property, plant, and Equipment and Related Accumulated Depreciation Accounts Year Ended December 31, 20X6 Assets Description 12/31/15 Additions Retirements Land $425,500 $ 5,200 Buildings 122,000 18,500 Machinery and equipment 387,000 40, 800 $ 25,500 $934,500 $ 64,500 $ 25,500 Per Ledger 12/31/X6 $430,700 140,500 402,300 $973,500 Description Buildings Machinery and equipment Final 12/31/15 $ 61,000 174,150 $235,150 Accumulated Depreciation Additions Retirements $ 5,250 39,605 $ 44,855 Per Ledger 12/31/X6 $ 66,250 213,755 $280,005 *Depreciation expense for the year. All plant assets are depreciated on the straight-line basis (no residual value taken into consideration) based on the following estimated service lives: building, 25 years, all other items, 10 years. The company's policy is to take one half-year's depreciation on all asset additions and disposals during the year. Your audit revealed the following information: 1. The company completed the construction of a wing on the plant building on June 30. The service life of the building was not extended by this addition. The lowest construction bid received was $18,500, the amount recorded in the Buildings account. Company personnel constructed the addition at a cost of $16,600 (materials, $7,700; labor, $5,700; and overhead, $3,200). 2. On August 18, $5,200 was paid for paving and fencing a portion of land owned by the company and used as a parking lot for employees. The expenditure was charged to the Land account. 3. The amount shown in the machinery and equipment asset retirement column represents cash received on September 5 upon disposal of a machine purchased in July 20x2 for $46,000. The chief accountant recorded depreciation expense of $3,100 on this machine in 20X6. 4. Harbor City donated land and a building appraised at $120,000 and $420,000, respectively, to Holman Corporation for a plant. On September 1, the company began operating the plant Since no costs were involved, the chief accountant made no entry for the above transaction. Required: Prepare the adjusting journal entries that you would propose at December 31, 20X6, to adjust the accounts for the above transactions. Disregard income tax implications. The accounts have not been closed. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round any division. Round your answers to the nearest dollar amount.) Journal entry worksheet Record the entry to correct the September 5, 20x6 entry for the disposal of the machine and the depreciation thereon. Note: Enter debits before credits. Debit Credit Transaction 3 General Journal Accumulated depreciation-Machinery and equipment Loss on sale of machinery and equipment Depreciation expense Machinery and equipment Record entry Clear entry View general journal