Question

On December 29, 2020, Patel Products, Inc., sells a delivery van that cost $20,000. The equipment had accumulated depreciation of $16,000 at December 31, 2019. Annual depreciation on this equipment is $2,000 computed using straight-line depreciation. Complete the necessary journal entry to bring the accumulated depreciation up-to-date.

Answer 1

Answer:

Cost of delivery van = $20,000

Accumulated depreciation of equipment = $16,000

Annual depreciation on this equipment = $2,000

Therefore, the journal entry is as follows:

On December 29, 2020

Depreciation expense A/c Dr. $2,000

      To Accumulated depreciation-Delivery van   $2,000

(To record the depreciation expense of the year)