On January 5, 2011, Holstrom Co. disposes of a machine costing $65,500
with accumulated depreciation of $35,284. Prepare the entries to record
the disposal under each of the following separate assumptions.
2. The machine is traded in for a newer machine having an
$86,125 cash price. A $31,912 trade-in allowance is received, and the
balance is paid in cash. Assume the asset exchange lacks commercial
substance.
