Question

Here are selected 2018 transactions of Wildhorse Corporation.

Jan. 1		Retired a piece of furniture that was purchased on January 1, 2008. The furniture cost $56,460 and had a useful life of 10 years with no residual value.
June 30		Sold equipment that was purchased on January 1, 2016. The equipment cost $37,350 and had a useful life of 3 years with no residual value. The equipment was sold for $4,900 cash.
Dec. 31		Sold a vehicle for $8,920 cash. The vehicle cost $23,980 when it was purchased on January 1, 2015, and was depreciated based on a 5-year useful life with a $2,730 residual value.

Wildhorse Corporation uses straight-line depreciation.

Prepare all entries required on the above dates, including entries to update depreciation on assets disposed of, where applicable.

Answer 1

Journal entry

Date	account and explanation	Debit	Credit
Jan 1	Accumulated depreciation-Furniture	56460
	Furniture		56460
June 30	Depreciation expense (37350/3)*6/12	6225
	Accumulated depreciation-equipment		6225
June 30	Cash	4900
	Accumulated depreciation-equipment	31125
	Loss on sale of equipment	1325
	Equipment		37350
Dec 31	Depreciation expense	4250
	Accumulated depreciation-Vehicle		4250
Dec 31	Cash	8920
	Accumulated depreciation-Vehicle	17000
	Gain on sale of vehicle		1940
	Vehicle		23980