During 2014, Rank Company disposed of three different assets. On January 1, 2014, prior to their disposal, the accounts reflected the following:

The machines were disposed of in the following ways:
a. Machine A: Sold on January 1, 2014, for $6,750 cash.
b. Machine B: Sold on December 31, 2014, for $8,000; received cash, $2,000, and a $6,000 interest-bearing (10 percent) note receivable due at the end of 12 months.
c. Machine C: On January 1, 2014, this machine suffered irreparable damage from an accident and was scrapped.

1. Give all journal entries related to the disposal of each machine.
2. Explain the accounting rationale for the way in which you recorded eachdisposal.

  • CreatedJuly 01, 2014
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