A truck costing $70,000 has accumulated depreciation of $51,000. The truck is scrapped for $0. The journal entry to record this transaction is to:

Question

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When a truck is scrapped for $0, it means that there is a loss on disposal. The cost of the truck is $70,000, and the accumulated depreciation is $51,000, which means that the book value of the truck is $19,000 ($70,000 - $51,000).

To record the scrapping of the truck, we need to debit the Accumulated Depreciation - Truck account for $51,000 to remove the amount of depreciation that has been recorded for the truck. We also need to debit the Loss on Disposal account for $19,000 to recognize the loss on disposal. Finally, we need to credit the Truck account for $70,000 to remove the asset from the balance sheet.

Therefore, the correct journal entry is:

Debit Accumulated Depreciation - Truck $51,000 
Debit Loss on Disposal $19,000 
Credit Truck $70,000

A Truck Costing $70,000 Has Accumulated Depreciation of $51,000