Chapter 9, Problem 2PB

Recording and Interpreting the Disposal of Long-Lived Assets

During the current year, Rayon Corporation disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following:

The machines were disposed of in the following ways:

1. a. Machine A: Sold on January 2 for $33,500 cash.
2. b. Machine B: On January 2, this machine suffered irreparable damage from an accident and was removed immediately by a salvage company at no cost.

Required:

1. 1. Give the journal entry related to the disposal of Machine A on January 2 of the current year.
2. 2. Give the journal entry related to the disposal of Machine B on January 2 of the current year.