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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Business

Aron Olson

10 December, 05:29

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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Denzel Woodward · Answer 1

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