Question

Chapter 8 Question 4: Onslow Co. purchases a used machine for $288,000 cash on January 2 and readies it for use the next day at a $10,000 cost. On January 3, it is installed on a required operating platform costing $2,000, and it is further readied for operations. The company predicts the machine will be used for six years and have a $34,560 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.

2. Prepare journal entries to record depreciation of the machine at December 31.

Record the first year year-end adjusting entry for the depreciation expense of the used machine.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Dec 31	Depreciation expense—Machinery	44,240
	Accumulated depreciation—Machinery		44,240

Record the year of disposal year-end adjusting entry for the depreciation expense of the used machine.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Dec 31

Answer 1

(1)Depreciation exp-machinery (Dr.) 44240

       Accumulated dep-mach       (Cr.)          44240

(2) Accumulated Dep-mach (Dr.)       221200

      Machinery                       (Cr.)          221200