Question

On July 1, 2015, Hale Kennels sells equipment for $220,000. The equipment originally cost $600,000, had...

On July 1, 2015, Hale Kennels sells equipment for $220,000. The equipment originally cost $600,000, had an estimated 5-year life and an expected salvage value of $100,000. The accumulated depreciation account had a balance of $350,000 on January 1, 2015, using the straight-line method.

1) Journal entry for the catch-up depreciation from Jan 1, to July 1, 2015

2) Journal entry showing the sale of the equipment on July 1, 2015

Homework Answers

Answer #1
Depreciation expense from jan 1 to july1
(600,000-100,000)/5
100000
100,000*6/12
50000
Journal entry
Date Account titles & Explanations Debit Credit
7/1/2015 Depreciation expense 50,000
Accumulated Depreciation 50,000
7/1/2015 Cash 220,000
Accumulated depreciation 400,000
Gain on sale of Equipment 20,000
Equipment 600,000
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