Question

Gunkelson Company sells equipment on September 30, 2017, for $19,200 cash. The equipment originally cost $73,400 and as of January 1, 2017, had accumulated depreciation of $42,400. Depreciation for the first 9 months of 2017 is $5,750.

Prepare the journal entries to (a) update depreciation to September 30, 2017, 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.)

NO Account titles and explanation DR CR

Answer 1

Requirement a

Date	Accounts title	Debit	Credit
Sep 30, 2017	Depreciation expense-Equipment	$ 5,750
	Accumulated Depreciation - Equipment		$ 5,750
	(depreciation expense recorded)

Requirement b

Date	General Journal	Debit	Credit
Sep 30 20017	Cash	$            19,200.00
	Accumulated Depreciation-Equipment	$            48,150.00
	Loss on sale of Fixture	$              6,050.00
	Equipment		$       73,400.00
	(To record sale of Equipment)

Working

Cost	$               73,400
Accumulated depreciation	$               48,150
Book value	$               25,250
Sales price	$               19,200
Book value	$               25,250
Gain /(loss)	$               (6,050)