Equipment costing $20,000 with $17,800 of accumulated depreciation is sold for $2,500 cash.The journal entry will involve a

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When equipment is sold, the accumulated depreciation associated with the equipment must be removed from the books. This is done by debiting the accumulated depreciation account for the amount of depreciation taken on the asset over its useful life. Therefore, the correct journal entry would be a debit to accumulated depreciation for $17,800. Additionally, since the company received cash for the equipment, there would be a credit to cash for $2,500. The difference between the cash received and the carrying amount of the asset (equipment cost - accumulated depreciation) represents a loss on the sale of the asset, which would result in a debit to the loss on sale of equipment account for $100 ([$20,000 - $17,800] - $2,500).

Equipment Costing $20,000 with $17,800 of Accumulated Depreciation Is Sold