Question

Equipment acquired on January 8 at a cost of $177,240 has an estimated useful life of 19 years, has an estimated residual value of $7,000, and is depreciated by the straight-line method.

b. Assume that the equipment was sold on April 1 of the fifth year for $133,780.

1. Journalize the entry to record depreciation for the three months until the sale date. If an amount box does not require an entry, leave it blank. Round your answers to the nearest whole dollar if required.

Deprecation expense- equipment

accumulated deprecation- equipment

2. Journalize the entry to record the sale of the equipment. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations.

cash

accumulated deprecation- equipment

loss on sale of equipment

equipment

Answer 1

1a) Journal entry

date	account and explanation	Debit	Credit
Apr 1	Depreciation expense (177240-7000/19)*3/12	2240
	Accumulated depreciation-equipment		2240

2) Journal entry

Date	account and explanation	Debit	Credit
Apr 1	Cash	133780
	accumulated deprecation- equipment (35840+2240)	38080
	loss on sale of equipment	5380
	Equipment		177240