Equipment that cost $420,000 and on which $200,000 of accumulated depreciation had been recorded was sold for $180,000 cash.The entry to record this transaction would include a

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The selling price of $180,000 is less than the book value of the equipment which is $220,000 ($420,000 cost - $200,000 accumulated depreciation). Therefore, the transaction resulted in a loss of $40,000. The Equipment and Accumulated Depreciation accounts will be credited to remove them from the books.

Equipment That Cost $420,000 and on Which $200,000 of Accumulated