Question

During the current year, Merkley Company disposed of three different assets. On January 1 of the current year, prior to the disposal of the assets, the accounts reflected the following:

Asset	Original Cost		Residual Value		Estimated Life	Accumulated Depreciation (straight line)
Machine A	$	21,000	$	3,000	8 years	$	15,750 (7 years)
Machine B		50,000		4,000	10 years		36,800 (8 years)
Machine C		85,000		5,000	15 years		64,000 (12 years)

The machines were disposed of during the current year in the following ways:

Machine A: Sold on January 1 for $5,000 cash.

Machine B: Sold on December 31 for $10,500; received cash, $2,500, and an $8,000 interest-bearing (12 percent) note receivable due at the end of 12 months.

Machine C: On January 1, this machine suffered irreparable damage from an accident. On January 10, a salvage company removed the m

I have to do journal enteries

Answer 1

Journal Entries:
Date	Accounts title and explanations					Debit$	Credit$
For machine-A
1-Jan	Cash account Dr.					5000
	Accumulated depreciation-MachineA Account Dr.					15750
	Loss on Sale of assets Account Dr.					250
	Machine Equipment-A Account						21000
Foe Machine-B
31-Dec	Depreciation expense Account Dr.					4600
	Accumulated depreciation Account						4600
31-Dec	Cash account Dr.					2500
	Notes receivable Account Dr.					8000
	Accumulated depreciation Account Dr.					41400
	Machine Equipment-B Account						50000
	Gain on Sale of Assets						1900
For Machine-C:
10-Jan	Accumulated depreciation Account Dr.					64000
	Loss on disposal of assets account Dr.					21000
	Machine Equipment-C Account						85000