Question

Napoli Manufacturing has old equipment that cost $52,000. The equipment has accumulated depreciation of $28,000. Napoli has decided to sell the equipment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) (a)What entry would Napoli make to record the sale of the equipment for $26,000 cash

Answer 1

Answer:

Cash Dr $26,000

Accumulated depreciation $28,000

        To Gain on sale of equipment $2,000

         To Equipment $52,000

(Being the sale of equipment is sold)

Explanation:

The journal entry is shown below:

Cash Dr $26,000

Accumulated depreciation $28,000

        To Gain on sale of equipment $2,000

         To Equipment $52,000

(Being the sale of equipment is sold)

For recording this we debited the cash and accumulated depreciation as it increased the assets and decreased the accumulated depreciation balance as it has always credit balance while at the same time we credited the equipment as it reduced the assets and the balancing figure is credited to the gain on sale of equipment