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9 May, 15:56

Gunkelson Company sells equipment on September 30, 2020, for $18,000 cash. The equipment originally cost $72,000 and as of January 1, 2020, had accumulated depreciation of $42,000. Depreciation for the first 9 months of 2020 is $5,250. Prepare the journal entries to (a) update depreciation to September 30, 2020, and (b) record the sale of the equipment.

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  1. 9 May, 16:11
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    Initial cost - 72000

    Accumulated depreciation as at January 1, 2020 = 42000

    Carrying value at January 1, 2020 (72,000-42000) - 30000

    Sales proceed = $5250

    Depreciation fr the first 9 months = $5250

    January 1 Debit Machine - 30000

    Debit Accumulated depreciation - 42,000

    September 30

    Credit machine 5250

    Debit accumulated depreciation 5250

    sales of equipment

    Credit machine (3000-5250) 24750

    Debit cash 18000

    Debit loss on disposal of asset 6750
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