Spa Sources Corporation purchased a machine that had an original cost of $60,000 and an estimated residual value of $10,000. The useful life was expected to be 8 years and straight-line depreciation is used. At the end of 2016, the book value of the machine was $35,000. Spa Sources sold the machine for $32,000 cash on October 1, 2017.
Required:
A.Prepare the journal entry to record depreciation for 2017 up to the date of sale.
B.Prepare the journal entry to record the sale of the machine.

Question

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The Answer of Spa Sources Corporation purchased a machine that had an original cost of $60,000 and an estimated residual value of $10,000. The useful life was expected to be 8 years and straight-line depreciation is used. At the end of 2016, the book value of the machine was $35,000. Spa Sources sold the machine for $32,000 cash on October 1, 2017.
Required:
A.Prepare the journal entry to record depreciation for 2017 up to the date of sale.
B.Prepare the journal entry to record the sale of the machine.

Spa Sources Corporation Purchased a Machine That Had an Original