A truck that cost $24,000 and on which $18,000 of accumulated depreciation has been recorded was disposed of on January 1.If the truck was discarded as having no value,the entry to record this event is:
A) Truck 24,000
Accumulated Depreciation- Truck 24,000
B) Truck 18,000
Accumulated Depreciation- Truck 18,000
C) Accumulated Depreciation- Truck 24,000
Truck 18,000
Gain on Sale of Equipment 6,000
D) Accumulated Depreciation- Truck 18,000
Loss on Sale of Truck 6,000
Truck 24,000

Question

Quizplus · Accepted Answer

When the truck is disposed of as having no value, it implies that there is a loss on the disposal of the truck, and the entry to record this event is:
Accumulated Depreciation - Truck 18,000
Loss on Sale of Truck 6,000
Truck 24,000
Option A and B are not correct because they don't take into consideration the loss on disposal. Option C is incorrect because the gain on the sale of equipment should not be recorded since the truck has been discarded as having no value.

A Truck That Cost $24,000 and on Which $18,000 of Accumulated