The entry to record the disposal of a laptop computer with a cost of $3,000 and an accumulated depreciation of $2,500 would be:

Question

Quizplus · Accepted Answer

The correct entry to record the disposal involves removing the asset's cost from the books by debiting Accumulated Depreciation for the amount of depreciation taken over the asset's life ($2,500) and recognizing any loss on disposal by debiting Loss on Disposal of an Asset for the difference between the asset's net book value and its disposal value (in this case, $500, since the asset is fully disposed of with no cash received). The Equipment account is credited for the original cost of the asset ($3,000) to remove it from the books.

The Entry to Record the Disposal of a Laptop Computer