Greetings Online disposed of a van that cost $22,000 with accumulated depreciation of $15,000.The journal entry would be to:

Question

Quizplus · Accepted Answer

When disposing of a plant asset for an amount less than its book value (in this case, $22,000 - $15,000 = $7,000), a loss is recognized for the difference between the book value and the amount received. Therefore, the journal entry should be to debit Loss Disposal of Plant Asset $7,000, debit Accumulated Depreciation $15,000, and credit Van $22,000. Option A is incorrect because it only removes the accumulated depreciation but does not account for the loss. Option B is incorrect because it incorrectly records additional depreciation expense. Option D is not applicable.

Greetings Online Disposed of a Van That Cost $22,000 with Accumulated