During the current year ended December 31, Rank Company disposed of three different assets. On January I

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During the current year ended December 31, Rank Company disposed of three different assets. On January I of the current year, prior to their disposal, the asset accounts reflected the following:
During the current year ended December 31, Rank Company disposed

The machines were disposed of during the current year in the following ways:
a. Machine A: Sold on January 1 for $6,750 cash.
b. Machine B: Sold on December 31 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, 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 each disposal.

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Financial Accounting

ISBN: 978-1259222139

9th edition

Authors: Robert Libby, Patricia Libby, Frank Hodge

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