On January 1, 2016, World Inc. purchased five machines at a cost of $14,000 each. The company adopted the group straight-line) depreciation method, using an eight-year life with a $2,800 salvage value per machine. Correct depreciation was recorded in 2014 and 2015. On January 1, 2018, one of the machines was sold for $6,500. On January 3, 2018, a new unrelated piece of equipment was purchased for $15,000 with no salvage value and a six- year life. It will be depreciated using the straight-line method.
Required:
Prepare appropriate journal entries for
a. January 1, 2018
b. December 31, 2018, to record depreciation expense

Question

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The Answer of On January 1, 2016, World Inc. purchased five machines at a cost of $14,000 each. The company adopted the group straight-line) depreciation method, using an eight-year life with a $2,800 salvage value per machine. Correct depreciation was recorded in 2014 and 2015. On January 1, 2018, one of the machines was sold for $6,500. On January 3, 2018, a new unrelated piece of equipment was purchased for $15,000 with no salvage value and a six- year life. It will be depreciated using the straight-line method.
Required:
Prepare appropriate journal entries for
a. January 1, 2018
b. December 31, 2018, to record depreciation expense