Rayya Co. purchases and installs a machine on January 1, 2017, at a total cost of $100,800. Straight-line depreciation is taken each year for four years assuming a seven-year life and no salvage value. The machine is disposed of on July 1, 2021, during its fifth year of service.
  
Prepare entries to record the partial year’s depreciation on July 1, 2021, and to record the disposal under the following separate assumptions: (1) The machine is sold for $43,200 cash. (2) An insurance settlement of $34,560 is received due to the machine’s total destruction in a fire.

Note: Enter debits before credits.

Record the Depreciation expense as of July 1, 2021

Date	General Journal	Debit	Credit
July 01, 2021	Depreciation expense
	Accumulated depreciation—Machinery

Record the sale of machinery for 43200 cash

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
July 01, 2021	Cash
	Accumulated depreciation—Machinery
	Gain on sale of machinery
	Machinery

Record the insurance settlement received of 34560 due to the machines total destruction in a fire

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
July 01, 2021	Cash
	Loss from fire
	Accumulated depreciation—Machinery
	Machinery

Answer rating: 100% (QA)

To record the partial years depreciation on July 1 2021 and the disposal of the machine ... View the full answer