During the current year, Yost Company disposed of three different assets. On January 1 of the current year, prior to the disposal of the assets, the accounts reflected the following:

The machines were disposed of during the current year in the following ways:
a. Machine A: Sold on January 1 for $5,000 cash.
b. Machine B: Sold on December 31 for $30,500; received cash, $22,500, and an $8,000 interest-bearing (12 percent) note receivable due at the end of 12 months.
c. Machine C: On January 1, this machine suffered irreparable damage from an accident. On January 10, a salvage company removed the machine at no cost.

Required:
1. Give all journal entries related to the disposal of each machine in the current year.
2. Explain the accounting rationale for the way that you recorded each disposal.

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Asset Machine A Machine B Machine C Original Cost $ 21,000 120,000 85,000 Residual Value $3,000 14,000 5,000 Estimated Life 8 years 10 years 15 years Accumulated Depreciation (straight line) $15,750 (7 years) 84,800 (8 years) 64,000 (12 years)