Kathy Company purchased and installed a machine on January 1, 2006 at a total cost of $72,000. Straight-line depreciation was calculated based on the assumption of a five-year life, and no salvage value. The machine was disposed of on July 1, 2010.
1. Prepare the general journal entry to record depreciation for 2010 from January 1 to the date of disposal
2. Prepare the general journal entry to record the disposal of the machine under each of these three independent situations:
a. The machine was sold for $22,000 cash.
b. The machine was sold for $15,000 cash.