Equipment purchased for $80,000 on January 1,2014,was sold on July 1,2017.The company uses the straight-line method of computing depreciation and recognizes $10,000 of depreciation expense annually.When recording the sale,the company should record a debit to Accumulated Depreciation for:

Question

Quizplus · Accepted Answer

From January 1, 2014 to July 1, 2017, there are 3.5 years of depreciation. Therefore, the total accumulated depreciation on the equipment would be $35,000 ($10,000 x 3.5). When the equipment is sold, the company should record a debit to Accumulated Depreciation for the total amount of depreciation that has been taken on the equipment up to the date of sale. Therefore, the correct answer is option C.

Equipment Purchased for $80,000 on January 1,2014,was Sold on July