Question

Exercise 9-9

Presented below are selected transactions at Novak Corp. for 2019.

Jan.	1		Retired a piece of machinery that was purchased on January 1, 2009. The machine cost $62,300 on that date. It had a useful life of 10 years with no salvage value.
June	30		Sold a computer that was purchased on January 1, 2016. The computer cost $42,600. It had a useful life of 5 years with no salvage value. The computer was sold for $13,400.
Dec.	31		Discarded a delivery truck that was purchased on January 1, 2015. The truck cost $42,300. It was depreciated based on a 6-year useful life with a $3,000 salvage value.

Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Novak Corp. uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2018.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Do not round intermediate calculations.)

Answer 1

Journal entry

Date	account and explanation	Debit	Credit
Jan 1	Accumulated depreciation-Machine	62300
	Machine		62300
	(To record machine retired)
June 30	Depreciation expense (42600/5)*6/12	4260
	Accumulated depreciation-Computer		4260
	(To record Dep)
June 30	Cash	13400
	Accumulated depreciation-Computer (42600/5*3.5)	29820
	Gain on Sale of computer		620
	Computer		42600
	(To record Sale of computer)
Dec 31	Depreciation expense (42300-3000/6)	6550
	Accumulated depreciation-Truck		6550
	(To record Dep)
Dec 31	Accumulated depreciation-Truck (6550*4)	26200
	Loss on discarded of truck	16100
	Truck		42300
	(To record discarded)