A business sold equipment for $44,900 cash.The equipment was purchased one month earlier for $44,900 but the plans for the equipment changed.

Question

Quizplus · Accepted Answer

When equipment is sold, the cash received is debited and the equipment account is credited. In this case, the equipment was sold for the same price it was purchased so there is no gain or loss to be recognized, and no need to credit or debit the Retained Earnings account. Therefore, the correct entry is C - Debit Cash for $44,900 and credit Equipment for $44,900.

A Business Sold Equipment for $44,900 Cash