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24 July, 07:50

Diaz Company owns a milling machine that cost $126,000 and has accumulated depreciation of $92,200. Prepare the entry to record the disposal of the milling machine on January 3 in each of the following independent situations. The machine needed extensive repairs, and it was not worth repairing. Diaz disposed of the machine, receiving nothing in return. Diaz sold the machine for $17,000 cash. Diaz sold the machine for $33,800 cash. Diaz sold the machine for $40,300 cash.

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  1. 24 July, 08:03
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    Journal Entry

    Explanation:

    1 Accumulated Depreciation Dr, $92,200

    Loss on Disposal Dr, $34,400

    To Machine Equipment $126,600

    (Being disposal is recorded)

    2. Cash Dr, $17,000

    Accumulated Depreciation Dr, $92,200

    Loss on sale/disposal Dr, $17,400

    To Machine Equipment $126,600

    (Being sale is recorded)

    3. Cash Dr, $34,400

    Accumulated Depreciation Dr, $92,200

    Machine Equipment $126,600

    (Being sale is recorded)

    4. Cash Dr, $40,300

    Accumulated Depreciation Dr, $92,200

    To Gain on sale/disposal $5,900

    To Machine Equipment $126,600

    (Being sale is recorded)
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