Question

Blossom Company sells equipment on September 30, 2020, for $20,100 cash. The equipment originally cost $72,800 and as of January 1, 2020, had accumulated depreciation of $42,100. Depreciation for the first 9 months of 2020 is $5,45. Prepare the journal entries to (a) update depreciation to September 30, 2015, and (b) record the sale of the equipment.

Answer 1

Answer:

Date             Account titles and explanation        Debit      Credit

30/09/2020  Depreciation expense                     $5,450

                     Accumulated depreciation                              $5,480

                     (To record depreciation expense)

30/09/2020    Accumulated depreciation            $47,550

                        Cash                                                $20,100

                        Loss on sale of equipment            $5,230

                        Equipment                                                         $72,880

                        (To record sale of equipment)