Gaston owns equipment that cost $90,500 with accumulated depreciation of $61,000.Gaston sells the equipment for $26,000.Which of the following would not be part of the journal entry to record the disposal of the equipment?

Question

Quizplus · Accepted Answer

The correct journal entry to record the disposal of equipment includes removing the equipment at its original cost (Credit Equipment $90,500), removing the accumulated depreciation (Debit Accumulated Depreciation $61,000), recording the cash received (Debit Cash $26,000), and recognizing a loss if the sale proceeds are less than the book value of the asset. In this case, the book value of the equipment is $90,500 - $61,000 = $29,500, and it was sold for $26,000, resulting in a loss of $3,500 (Debit Loss on Disposal of Equipment $3,500). Therefore, crediting a gain on disposal of equipment would not be correct since the equipment was sold at a loss, not a gain.

Gaston Owns Equipment That Cost $90,500 with Accumulated Depreciation of $61,000.Gaston