On January 2, 2011, Bering Co. disposes of a machine costing $52,400 with accumulated depreciation of $28,227. Prepare the entries to record the disposal under each of the following separate assumptions.
1. Machine is sold for $20,274 cash.
2. Machine is traded in on a newer machine having a $68,900 cash price. A $24,953 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange lacks commercial substance.
3. Machine is traded in on a newer machine having a $68,900 cash price. An $18,714 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance.