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Journalize the gain or loss of sale of the machine

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Question - On November 1, 2017 Sunrise Plastic Industries (SPI) purchased a plastic moulding machine costing $93,600. The machine is estimated to have a useful life of six-year with an estimated residual value of $7,200 at the end of that time. SPI paid $14,400 down and the balance with a 6% note payable of 90 days. SPI operating year ends December 31 of each year and the company uses the straight-line method of depreciation for all its fixed assets. (Use 360 days in the calculation of interest)

Required -

(a) Record the adjusting entry for depreciation for the year ended December 31, 2017. Explanation is not required.

(b) Record the adjusting entry for accrual interest for the year ended December 31, 2017. Explanation is not required.

(c) Assume that on July 1, 2021, SPI sold the machine to XYZ Company for $35,600 cash. Journalize the gain or loss of sale of the machine. Explanation is not required.

Reference no: EM132960933

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