Question

The University of Northern Utah purchased a machine for $200,000 in cash on July 1 of Year 1. The machine has an estimated useful life of 5 years and an estimated salvage value of $20,000. The University of Northern Utah uses the straight-line method for computing depreciation expense.

Which ONE of the following is included in the journal entry necessary to record the sale of the machine for $105,000 cash at the end of Year 3? Note: The sale takes place after the recording of depreciation expense for Year 3 has been completed.

		DEBIT to Accumulated Depreciation for $108,000
		CREDIT to Gain on Sale of Machine for $13,000
		CREDIT to Machine for $108,000
		CREDIT to Machine for $110,000
		DEBIT to Loss on Sale of Machine for $5,000
		CREDIT to Accumulated Depreciation for $90,000
		CREDIT to Loss on Sale of Machine for $7,500
		DEBIT to Accumulated Depreciation for $30,000

Answer 1