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Exercise 9-11 Oriole Company owns equipment that cost $70,000 when purchased on January 1, 2019. It...

Exercise 9-11 Oriole Company owns equipment that cost $70,000 when purchased on January 1, 2019. It has been depreciated using the straight-line method based on an estimated salvage value of $10,000 and an estimated useful life of 5 years. Prepare Oriole Company’s journal entries to record the sale of the equipment in these four independent situations. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) (a) Sold for $36,000 on January 1, 2022. (b) Sold for $36,000 on May 1, 2022. (c) Sold for $14,000 on January 1, 2022. (d) Sold for $14,000 on October 1, 2022. No. Account Titles and Explanation Debit Credit (a) (b) (To record depreciation) (To record sale of equipment) (c) (d) (To record depreciation)

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Answer #1

a) Journal entry

Date account and explanation Debit Credit
Jan 1 Cash 36000
Accumulated depreciation-equipment (70000-10000/5*3) 36000
Gain on Sale of equipment 2000
Equipment 70000
(To record sale of equipment)

b) Journal entry

Date account and explanation Debit Credit
May 1 Cash 36000
Accumulated depreciation-equipment (70000-10000/5*3+4000) 40000
Gain on Sale of equipment 6000
Equipment 70000
(To record sale of equipment)

c) Journal entry

Date account and explanation Debit Credit
Jan 1 Cash 14000
Accumulated depreciation-equipment (70000-10000/5*3) 36000
Loss on Sale of equipment 20000
Equipment 70000
(To record sale of equipment)

d) Journal entry

Date account and explanation Debit Credit
Oct 1 Cash 14000
Accumulated depreciation-equipment (70000-10000/5*3+9000) 45000
Loss on Sale of equipment 11000
Equipment 70000
(To record sale of equipment)
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