Required information [The following information applies to the questions displayed below.] Freeman Landscaping purchased a tractor at a cost of $37,000 and sold it three years later for $18,800. Freeman recorded depreciation using the straight-line method, a five-year service life, and a $2,500 residual value. Tractors are included in the Equipment account. Required: 1. Record the sale. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Required information [The following information applies to the questions displayed below.] Freeman Landscaping purchased a tractor at a cost of $37,000 and sold it three years later for $18,800. Freeman recorded
![Required information
[The following information applies to the questions displayed below.]
Freeman Landscaping purchased a tractor at a cost of $37,000 and sold it three years later for $18,800. Freeman
recorded depreciation using the straight-line method, a five-year service life, and a $2,500 residual value. Tractors are
included in the Equipment account.
Required:
1. Record the sale. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account
field.)
View transaction list
Journal entry worksheet
1
Record the sale of tractor.
Note: Enter debits before credits.
Transaction
1
General Journal
Debit
Credit
View general journal
Record entry
Clear entry](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8cf7eb1b-f296-41b9-8fd4-47448748b44d%2F7851c14e-1d04-427a-9f52-7f83e140fcc1%2F5ufzg4q_processed.jpeg&w=3840&q=75)
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