The following balances have been extracted from Joel's books at 31 December 2003. Machinery at Cost $18 000; Provision for Depreciation of Machinery $9600. 

Joel's transactions in 2004 included the following.

Joel depreciates his machinery using the straight-line method and the rate of 10% per annum. He provides for a full year's depreciation in the year of purchase, but none in the year of disposal.

Required 

Prepare the following accounts to show the transactions on 7 May and 3 June: 

(a) Machinery at Cost 

(b) Provision for Depreciation of Machinery 

(c) Machinery Disposal.

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May 7 Sold machine No. 1 for $1500. This machine cost $6000 when purchased in 2000. June 3 Purchased machine No. 3 which was priced at $10 000. Joel paid $7000 and gave machine No. 2 in part exchange. Machine No. 2 cost $12 000 when purchased in 1998.