Answer:
Onslow Co.
Journal Entries;
Jan. 2:
Debit Equipment $192,000
Credit Cash Account $192,000
To record the purchase of used machine by cash.
Jan. 3:
Debit Equipment $9,600
Credit Cash Account $9,600
To record the repair and installation costs.
December 31:
Debit Depreciation Expense $29,760
Credit Accumulated Depreciation $29,760
To record depreciation expense for the period.
Debit Sale of Equipment $201,600
Credit Equipment $201,600
To transfer the sale of equipment to Equipment.
On Disposal:
Debit Accumulated Depreciation $148,800
Credit Sale of Equipment $148,800
To record the disposal
Explanation:
Jan. 2 purchase of a used machine $192,000
Jan. 3 repair expenses 8,000
Jan. 3 installation 1,600
Total cost of acquisition $201,600
Salvage value 23,040
Depreciable amount 178,560
Depreciation per year $29,760 ($178,560 / 6)
Accumulated Depreciation for 5 years = $148,800 ($29,760 x 5)
