Question

On December 31st, Management decides to sell one piece of equipment with a historical cost of $15,000, and accumulated depreciation of $3,000. At the end of its useful life this equipment was previously deemed to have no salvage value. Cash proceeds on this sale were $10,000.

Transaction has not been recorded.

Answer 1

The transaction is not recorded so we will record the transaction. The accounting entry to record diposal is given below.

Debit Cash Asset $ 10,000

Debit Accumulated Depreciation $ 3,000

Debit loss on disposal $ 2,000

Credit equipment Cost $ 15,000