Micron Precision purchased equipment on January 1, 2018 , for $ 40,606. Suppose Micron Precision sold the equipment for $ 30,000 on December 31, 2019. Accumulated Depreciation as of December 31, 2019 , was $ 12,494. Journalize the sale of the equipment, assuming straight-line depreciation was used.

The journal entry is shown below:

Cash A/c Dr $30,000

Accumulated Depreciation - Equipment A/c $12,494

To Equipment A/c $40,606

To Gain on Disposal of Equipment $1,888

(Being sale of machinery is recorded and the remaining balance is credited to the Gain on Disposal of Machinery A/c)

The computation is shown below:

= $30,000 + $12,494 - $40,606

= $1,888