During 2012, Jensen Company disposed of three different assets. On January 1, 2012, 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, 2012, for $7,200 cash.
(b) Machine B: Sold on December 31, 2012, for $8,500; received cash, $2,500, and a $6,000 interest bearing (12 percent) note receivable due at the end of 12 months.
(c) Machine C: On January 1, 2012, this machine suffered irreparable damage from an accident. On January 10, 2012, a salvage company removed the machine at no cost.
Required:
1. Give all journal entries related to the disposal of each machine in 2012.
2. Explain the accounting rationale for the way that you recorded eachdisposal.

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Accumulated Depreciation (straight line) $13,500 (6 years) 29,600 (8 years) 56,000 (12 years) Original Cost Residual Value Estimated Asset Life $3,000 4,000 5,000 Machine A Machine B Machine C $21,000 10 years 15 years 75,000