Question

Pearl Corporation owns machinery that cost $27,600 when purchased on July 1, 2017. Depreciation has been recorded at a rate of $3,312 per year, resulting in a balance in accumulated depreciation of $11,592 at December 31, 2020. The machinery is sold on September 1, 2021, for $14,490. Prepare journal entries to

(a) update depreciation for 2021 and
(b) record the sale.

Answer 1

Answer:

Updating a depreciation for 2021 and recording the sale

1/9/21

Depreciation Expense (3312 * (8/12)=$2208

Accumulated depreciation $2208

Recording depreciation expense for the period

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Cash $14,490

Accumulated depreciation.

$13,800 ($11,592+$2208)

Machinery. $27,600

Gain on disposal. $690

Recording sales of machine