Ly Company disposed of two different assets.
On January 1, prior to their disposal, the accounts reflected the following:
Original Cost Residual Value Estimated Life Accumulated Depreciation
Asset (straight-line)
Machine A $39,000 $4,500 6 years $28,750 (5 years)
Machine B 75,200 5,900 14 years 54,450 (11 years)
The machines were disposed of in the following ways:
a. Machine A: Sold on January 1 for $11,000 cash
b. Machine B: On January 1, this machine suffered irreparable damage from an accident and was removed immediately by a salvage company at no cost.
Required:
Prepare the journal entries related to the disposal of Machine A and B at the beginning of the current year.