The balance sheet of Doorbell Ltd at 31 December 2014 showed:
$
Equipment 80 000
Accumulated depreciation of equipment 63 000
17 000
On 1 January 2015 the equipment was sold for $15 000.What is the accounting entry to record the receipt of the proceeds from the sale of the equipment?

Question

Quizplus · Accepted Answer

The proceeds from the sale of equipment should be credited to the account "proceeds from sale of equipment" to record the inflow of cash. The equipment account should be credited for the carrying value of the equipment, which is $17,000 ($80,000 cost - $63,000 accumulated depreciation). Therefore, the accounting entry should be:
Debit bank $15,000
Credit "proceeds from sale of equipment" $15,000
Credit "equipment" $17,000

The Balance Sheet of Doorbell Ltd at 31 December 2014