Answer:
Frontier Corporation
Journal Entry to record the sale:
Debit Cash $84,000
Credit Sale of Equipment $84,000
To record the sale of the equipment.
Others:
Debit Sale of Equipment $474,000
Credit Equipment $474,000
To transfer the equipment account to the Sale of Equipment account.
Debit Accumulated Depreciation $360,000
Credit Sale of Equipment $360,000
To transfer the accumulated depreciation to the Sale of Equipment account.
Debit Loss from Sale of Equipment $30,000
Credit Sale of Equipment $30,000
To close the Sale of Equipment account to income statement.
Explanation:
a) Data and Calculations:
January 1, 2018: Purchase of equipment = $474,000
Estimated useful life = 10 years
Estimated salvage value = $24,000
Depreciable amount = $450,000 ($474,000 - $24,000)
Straight-line Annual Depreciation Expense = $45,000 ($450,000/10)
Accumulated depreciation after 8 years = $360,000 ($45,000 * 8)
Net book value of equipment = $114,000 ($474,000 - $360,000)
December 31, 2015: Proceeds from sale of equipment = $84,000
Analysis:
Cash $84,000 Sale of Equipment $84,000
Sale of Equipment $474,000 Equipment $474,000
Accumulated Depreciation $360,000 Sale of Equipment $360,000
Loss from Sale of Equipment $30,000 Sale of Equipment $30,000
