Future Foundations purchased equipment on January 1, 2019, for $50,000, with an estimated useful life of 5 years and an estimated residual value of $5,000. The company uses the straight-line method of depreciation. On July 1, 2021, the equipment was sold for $17,500 cash.
Prepare journal entries for the following:
A) Depreciation expense for 2019;
B) Depreciation expense for 2020; and
C) Sale of the equipment in 2021.

Question

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The Answer of Future Foundations purchased equipment on January 1, 2019, for $50,000, with an estimated useful life of 5 years and an estimated residual value of $5,000. The company uses the straight-line method of depreciation. On July 1, 2021, the equipment was sold for $17,500 cash.
Prepare journal entries for the following:
A) Depreciation expense for 2019;
B) Depreciation expense for 2020; and
C) Sale of the equipment in 2021.

Future Foundations Purchased Equipment on January 1, 2019, for $50,000