Equipment costing $35,000 with a book value of $12,000 is sold for $11,500.The journal entry will involve:

Question

Quizplus · Accepted Answer

The equipment has a book value of $12,000 and was sold for $11,500, resulting in a loss of $500. The loss should be recorded by debiting the Loss on Sale of Equipment account and crediting Equipment for $35,000. The difference between the sale price and the book value of the equipment must be accounted for in the Accumulated Depreciation account, which means crediting the account for the total accumulated depreciation ($23,000) and debiting the account for the portion of accumulated depreciation that relates to the sold equipment ($12,000). This results in a debit to Accumulated Depreciation for $23,000.

Equipment Costing $35,000 with a Book Value of $12,000 Is