Finesse Co. purchases and installs a machine on January 1, 2011, at a
total cost of $92,750. Straight-line depreciation is taken each year for
four years assuming a seven-year life and no salvage value. The machine
is disposed of on July 1, 2015, during its fifth year of service.
Required:
Prepare entries to record the partial year’s depreciation on July 1, 2015.
Prepare entries to record the disposal under the following separate assumptions:
(1) The machine is sold for $35,000 cash. (Omit the \"$\" sign in your response.)
(2) Finesse receives an insurance settlement of $30,000
resulting from the total destruction of the machine in a fire.
