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Sheridan Company owns equipment that cost $72,000 when purchased on January 1, 2019. It has been depreciated using the straight-line method based on an estimated salvage value of $12,000 and an estimated useful life of 5 years. Prepare Sheridan Company's journal entries to record the sale of the equipment in these four independent situations. (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 O for the amounts.) (a) Sold for $38,000 on January 1, 2022. (b) Sold for $38,000 on May 1, 2022. (c) Sold for $21,000 on January 1, 2022. (d) Sold for $21,000 on October 1, 2022.

Answer 1

Journal entries

No	General Journal	Debit	Credit
a	Cash	38000
	Accumulated depreciation-equipment (72000-12000/5*3)	36000
	Gain on sale of equipment		2000
	Equipment		72000
b	Depreciation expense (72000-12000/5)*4/12	4000
	Accumulated depreciation-equipment		4000
	(To record depreciation)
	Cash	38000
	Accumulated depreciation-equipment	40000
	Gain on sale of equipment		6000
	Equipment		72000
	(to record sale of equipment)
c	Cash	21000
	Accumulated depreciation-equipment	36000
	Loss on sale of equipment	15000
	Equipment		72000
d	Depreciation expense	9000
	Accumulated depreciation-equipment		9000
	(To record Dep)
	Cash	21000
	Accumulated depreciation-equipment	45000
	Loss on sale of equipment	6000
	Equipment		72000
	(To record sale of equipment)