On December $31,2020,$ Pronghorn Inc. has a machine with a book value of $$996,400.$ The original cost and related accumulated

depreciation at this date are as follows.

Depreciation is computed at $$63,600$ per year on a straight$-$line basis.

Presented below is a set of independent situations. For each independent situation, indicate the journal entry to be made to record

the transaction. Make sure that depreciation entries are made to update the book value of the machine prior to its disposal.

$($a$)$

A fire completely destroys the machine on August $31,2021.$ An insurance settlement of $$455,800$ was received for this casualty.

Assume the settlement was received immediately. $($Credit account titles are automatically indented when amount is entered. Do not

indent manually. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts.$)$

Date

Account Titles and Explanation

Credit

August $31,2021$

$($To record current depreciation.$)$

August $31,2021$

$($To record loss of the machine.$)$