Question

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

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