Equipment purchased for $85,000 on January 1, 2006, was sold on July 1, 2009. The company uses the straight- line method of computing depreciation and recognizes $17,000 of depreciation expense annually. When recording the sale, the company should record a debit to Accumulated Depreciation for:

Question

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The equipment was purchased for $85,000 and depreciated by $17,000 per year for 3.5 years (from January 1, 2006 to July 1, 2009). Therefore, the accumulated depreciation is $17,000 x 3.5 = $59,500. When the equipment is sold, the accumulated depreciation is debited for $59,500.

Equipment Purchased for $85,000 on January 1, 2006, Was Sold