A truck that cost $12,000 and on which $9,000 of accumulated depreciation has been recorded was disposed of on January 1.Assume that the truck was disposed of for $2,000 cash.The entry to record this event is:

Question

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The entry to record the sale of the truck would include three accounts: cash, the amount received for the truck; Accumulated Depreciation, the total amount of depreciation recorded on the truck up the time of disposal and Truck, the cost of the truck. The difference between the amount received and the cost, less the accumulated depreciation is the loss on the sale.
 
Cash  2,000  
Accumulated Depreciation- Truck  9,000  
Loss on Sale of Truck  1,000  
Truck  12,000

Option A is incorrect because the total amount of accumulated depreciation should be removed from the books, but only $3,000 was removed.
 
Option B is incorrect because the loss on the sale should be $1,000, which is the difference between the cash received and the book value after depreciation, not $3,000.
 
Option D is incorrect because it does not account for the cash received from the sale of the truck.

A Truck That Cost $12,000 and on Which $9,000 of Accumulated