On january 2, 2017, bering co. disposes of a machine costing $44,000 with accumulated depreciation of $24,625. prepare the entries to record the disposal. under each of the following separate assumptions. 1.the machine is sold for $18,250 cash.2.the machine is traded in for a newer machine having a $60,200 cashprice. a $25,000 trade-in allowance is received, and the balance is paidin cash. assume the asset exchange has commercial substance.3.the machine is traded in for a newer machine having a $60,200 cashprice. a $15,000 trade-in allowance is received, and the balance is paidin cash. assume the asset exchange has commercial substance.

Scenario 1: Loss on Disposal of $1,125

Scenario 2: Gain on Disposal of $5,625  

Scenario 3: Loss on Disposal of $4,375

Explanation:

Scenario 1

                                                                      Debit           Credit  

DebitCash Received                                       $18,250  

DebitAccumulated Depreciation                      $24,625  

DebitLoss on Disposal (Balancing Figure)      $1,125  

CreditMachine at Cost                                                        $44,000  

(To record disposal of Machine for Cash)

Scenario 2

                                                                      Debit           Credit  

DebitNew Machine - Trade in Allowance      $25,000  

DebitAccumulated Depreciation                      $24,625  

CreditGain on Disposal (Balancing Figure)                        $5,625  

CreditMachine at Cost                                                        $44,000  

(To record disposal of Machine with Trade in Allowance)

DebitNew Machine at Cost                           $60,200  

CreditTrade in Allowance                                           $25,000  

CreditCash                                                                    $35,200  

(To record acquisition of New Machine)

Scenario 3

                                                                      Debit           Credit  

DebitNew Machine - Trade in Allowance    $15,000  

DebitAccumulated Depreciation                    $24,625  

DebitLoss on Disposal (Balancing Figure)    $4,375  

CreditMachine at Cost                                                       $44,000  

(To record disposal of Machine with Trade in Allowance)

DebitNew Machine at Cost                           $60,200  

CreditTrade in Allowance                                             $15,000  

CreditCash                                                                      $45,200  

(To record acquisition of New Machine)

A cross cheque means, the cheque can be deposited in account

only, while an open cheque means, the the bearer can withdraw

cash.

Cross cheque means cheque amount only paid to bank account

open cheque cash withdrawal by parties

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