During the current year, Martinez Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following:
| Asset |
Original
Cost |
Residual
Value |
Estimated
Life |
Accumulated
Depreciation
(straight-line) |
| Machine A |
$ |
86,200 |
|
$ |
10,600 |
|
15 |
years |
$ |
65,520 |
(13 years) |
| Machine B |
|
30,000 |
|
|
4,000 |
|
8 |
years |
|
19,500 |
(6 years)
|
The machines were disposed of in the following ways:
a. Machine A: Sold on January 2 for $30000 cash.
b. Macj=hine B: On January 2, this machine suffered irreparable damage from an accident and was removed immediately by a salvage company at no cost.
Required:
1.&2. Prepare the Journal entries related to the disposal of Machine A and B on January 2 of the current year