During 2015, Merkley Company disposed of three different assets. On January 1, 2015, 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, 2015, for $5,000 cash.
b. Machine B: Sold on December 31, 2015, for $10,500; received cash, $2,500, and a $8,000 interest-bearing (12 percent) note receivable due at the end of 12 months.
c. Machine C: On January 1, 2015, this machine suffered irreparable damage from an accident. On January 10, 2015, a salvage company removed the machine at no cost.

Required:
1. Give all journal entries related to the disposal of each machine in 2015.
2. Explain the accounting rationale for the way that you recorded eachdisposal.

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Original Cost Residual Value Estimated Life Accumulated Depreciation (straight line) Asset Machine A 2,000 Machine B Machine C $3,000 4.000 5,000 8 years 10 years 15 years $15,750 (7 years) 50,000 85.000 36,800 (8 years) 64,000 (12 years)