On January 1, 2014, World Inc. purchased five machines at a cost of $14,000 each. The company adopted the group (straight-line) depreciation method, using an eight-year life with a $2,800 salvage value per machine. Correct depreciation was recorded in 2014 and 2015. On January 1, 2016, one of the machines was sold for $6,500. On January 3, 2016, a new unrelated piece of equipment was purchased for $15,000 with no salvage value and a six-year life. It will be depreciated using the straight-line method.
Required:
Prepare appropriate journal entries for
a.January 1, 2016
b.December 31, 2016, to record depreciation expense

Question

On January 1, 2014, World Inc. purchased five machines at a cost of $14,000 each. The company adopted the group (straight-line) depreciation method, using an eight-year life with a $2,800 salvage value per machine. Correct depreciation was recorded in 2014 and 2015. On January 1, 2016, one of the machines was sold for $6,500. On January 3, 2016, a new unrelated piece of equipment was purchased for $15,000 with no salvage value and a six-year life. It will be depreciated using the straight-line method.
Required:
Prepare appropriate journal entries for 
a.January 1, 2016
b.December 31, 2016, to record depreciation expense

Quizplus · Accepted Answer

The Answer of On January 1, 2014, World Inc. purchased five machines at a cost of $14,000 each. The company adopted the group (straight-line) depreciation method, using an eight-year life with a $2,800 salvage value per machine. Correct depreciation was recorded in 2014 and 2015. On January 1, 2016, one of the machines was sold for $6,500. On January 3, 2016, a new unrelated piece of equipment was purchased for $15,000 with no salvage value and a six-year life. It will be depreciated using the straight-line method.
Required:
Prepare appropriate journal entries for 
a.January 1, 2016
b.December 31, 2016, to record depreciation expense