Question

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.

Required:
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.


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  • CreatedJuly 01, 2014
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