Question

XYZ sold an asset with a cost of $25,000 and accumulated depreciation at the time of sale of $15,000 for $11,500. Prepare the journal entry for this transaction.

Answer 1

Solution

General Journal	Debit	Credit
Cash	$            11,500.00
Accumulated Depreciation-Equipment	$            15,000.00
Gain on sale of Asset		$     1,500.00
Asset		$ 25,000.00
(To record sale of Asset)

Working

Cost	$         25,000.00
Accumulated depreciation	$         15,000.00
Book value	$         10,000.00
Sales price	$         11,500.00
Book value	$         10,000.00
Gain /(loss)	$           1,500.00