Question

Blue Corporation owns machinery that cost $41,600 when purchased on January 1, 2020. Depreciation has been recorded at a rate of $6,240 per year, resulting in a balance in accumulated depreciation of $12,480 at December 31, 2021. The machinery is sold on September 1, 2022, for $27,060. Prepare journal entry to update depreciation for 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Debit Credit Date Account Titles and Explanation September 1, 2022 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO VIDEO Prepare journal entry to record the disposal. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Debit Credit Date Account Titles and Explanation September 1, 2022

Answer 1

Answer

--Journal entry required

Date	Accounts title	Debit	Credit
01-Sep-22	Depreciation expense - machine ($6240 x 8/12)	$4,160
	Accumulated Depreciation - machinery		$4,160
	(to record and update 8 months depreciation)
Date	Accounts title	Debit	Credit
01-Sep-22	Cash	$27,060
	Accumulated Depreciation - machinery	$16,640
	Gain on disposal		$2,100
	Machinery		$41,600
	(to record sale/disposal)