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Onslow co purchases a used machine for

03/05/2021 Client: muhammad11 Deadline: 2 Day

Onslow Co. purchases a used machine for $178,000 cash on January 2 and readies it for use the next day at $2,840 cost. On January 3, it is installed on a required operating platform costing $1,160, and it is further readied for operations. The company predicts the machine will be used for six years and have a $14,000 salvage value. Depreciation is to be charged on a straight-line basis. On December 31, at the end of its fifth year in operations it is disposed of.
1. Prepare journal entries to record the machine's purchases and the costs to ready and install it. Cash is paid for all costs incurred.
2. Prepare journal entries to record depreciation of the machine at December 31 (a) its first year in operations and (b) the year of its disposal
3. Prepare journal entries to record the machine's disposal under each of the following separate assumptions:
(a) It is sold for $15,000 cash;
(b) It is sold for 50,000 cash; and
(c) It is destroyed in a fire and the insurance company pays $30,000 cash to settle the loss claim

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