Mercury Inc. purchased equipment in 2016 at a cost of $400,000. The equipment was expected to produce 700,000 units over the next five years and have a residual value of $50,000. The equipment was sold for $210,000 part way through 2018. Actual production in each year was: 2016 = 100,000 units; 2017 = 160,000 units; 2018 = 80,000 units. Mercury uses units-of-production depreciation, and all depreciation has been recorded through the disposal date.
Required:
1. Prepare the journal entry to record the sale.
2. Assuming that the equipment was sold for $245,000, prepare the journal entry to record the sale.