Milk Company bought a machine on 1 January 2015 for $5,000,000. The machine has an estimated useful life of 10 years with no residual value. The company uses straight-line depreciation method, cost...

Milk Company bought a machine on 1 January 2015 for $5,000,000. The machine has an estimated useful life of 10 years with no residual value. The company uses straight-line depreciation method, cost model for all its PPE and its balance day is 31 December.

At December 31, 2017, the fair value less cost to sell the machine is $3,350,000 and the present value of expected future cash flow on the machine is $3,412,500. The recoverable amount of the machine at December 31, 2018, is estimated to be $2,975,000.

Prepare the necessary journal entries to record the above transactions.