During 2003, Jensen Company disposed of three different assets. On January 1. 2003. prior to their disposal,
Question:
During 2003, Jensen Company disposed of three different assets. On January 1. 2003. prior to their disposal, the accounts reflected the following:
The machines were disposed of in the following ways:
a. Machine A: Sold on January 1 , 2003, for $8,200 cash.
b. Machine B: Sold on December 31, 2003, for $7,000; received cash, $3,000. and a $4,000 interestbearing (\2%) note receivable due at the end of 12 months.
c. Machine C: On January 1. 2003. this machine suffered irreparable damage from an accident. On January 10, 2003, a salvage company removed the machine at no cost.
Required: 1. Give all journal entries related to the disposal of each machine in 2003. 2. Explain the accounting rationale for the way that you recorded each disposal.
Step by Step Answer:
