Onslow Co. purchases a used machine for $288,000 cash on January 2 and readies it for use the next day at a $8,000 cost. On January 3, it is installed on a required operating platform costing $1,600, and it is further readied for operations. The company predicts the machine will be used for six years and have a $34,560 salvage value. Depreciation is to be charged on a straight-line basis. On December 31, at the end of its fifth year in operations, it is disposed
Prepare journal entries to record the machine's disposal under each of the following separate assumptions:
(a) It is sold for $24,000 cash.
Record the sale of the used machine for $24,000 cash.
(b) It is sold for $96,000 cash.
Record the sale of the used machine for $96,000 cash.
(c) It is destroyed in a fire and the insurance company pays $34,500 cash to settle the loss claim.
Record the insurance settlement received of $34,500 resulting from the total destruction of the machine in a fire.