Question

Alpha Company purchased a non-current asset for $20,000 cash two years ago. It had a four year life and was going to be depreciated using the straight line method (no residual). After two years, its accumulated depreciation was $10,000. The asset was sold to Beta Company for $12,000 cash at the end of year 2. It still had two years of life remaining. Provide the general journal entry to record this sale.

Answer 1

Answer

--JOurnal entry would be

Date	Accounts title	Debit	Credit
End of Year 2	Cash	$12,000
	Accumulated Depreciation	$10,000
	Gain on Sale [$ 12000 cash -( 20000 cost- 10000 Dep)]		$2,000
	Non Current Assets		$20,000
	(to record sale)