Equipment was purchased for $36,000 on January 1, 2020. The equipment's estimated useful life was eight years and its residual value was $6,000. The straight-line method of depreciation was used. a. Calculate the gain or loss on sale if the equipment is sold for $27,500 on December 31, 2022, the end of the third accounting period. b. Prepare the journal entry to record the sale of equipment.

Equipment was purchased for $36,000 on January 1, 2020. The equipment's estimated useful life was eight years and its residual value was $6,000. The straight-line method of depreciation was used. a. Calculate the gain or loss on sale if the equipment is sold for $27,500 on December 31, 2022, the end of the third accounting period. b. Prepare the journal entry to record the sale of equipment.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 8P: Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of...

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