Question

Marigold Corp. sells equipment on September 30, 2019, for $17,000 cash. The equipment originally cost $71,600 and as of January 1, 2019, had accumulated depreciation of $42,100. Depreciation for the first 9 months of 2019 is $5,350. Prepare the journal entries to (a) update depreciation to September 30, 2019, and (b) record the sale of the equipment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Answer 1

Answer:

Only two entries are required.

Explanation:

Marigold Corporation

General Journal

Date                Particulars                        Debit               Credit

September 30    Depreciation Expense     $5,350 Dr

                    Accumulated Depreciation                         $5,350 Cr

Updating the depreciation expense by $5350  and crediting accumulated depreciation account.

Recording the sale of the equipment.

September 30    Accumulated Depreciation  $47,450 Dr

                           Cash                                       $17,000 Dr

                         Loss on Sale                           $ 7150  Dr

                           Equipment                                           $71,600 Cr

The equipment is sold for $ 17,000 cash and there's a loss of $  7150.