Q23. Sale of equipment
Entity A sold the following equipment.
(a) Cost of equipment = $70,000
(b) Accumulated depreciation = $63,000
(c) Sale price of equipment = $8,500
Prepare a journal entry to record this transaction.
A23. Decrease in accumulated depreciation is recorded on the debit side. Decrease in equipment is recorded on the credit side.
|Gain on sale of equipment||1,500|
1. Book value of equipment = Cost of equipment – Accumulated depreciation
= $70,000 – $63,000 = $7,000
2. Gain on sale of equipment = Sale price – Book value of equipment
= $8,500 – $7,000 = $1,500