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Rayya Co. purchases a machine for $210,000 on January 1, 2020. Straight-line depreciation is taken each...

Rayya Co. purchases a machine for $210,000 on January 1, 2020. Straight-line depreciation is taken each year for four years assuming a eight-year life and no salvage value. The machine is sold on July 1, 2024, during its fifth year of service.

Prepare entries to record the partial year’s depreciation on July 1, 2024, and to record the sale under each separate situation. (1) The machine is sold for $105,000 cash. (2) The machine is sold for $88,200 cash.

1)Record the depreciation expense as of July 1, 2024.

2)Record the sale of the machinery for $105,000 cash.

3)Record the machine sold for $88,200 cash.

Business   Accounting   
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Answer #1

Journal entry

Date General Journal Debit Credit
July 1,2024 Depreciation expense (210000/8)*6/12 13125
Accumulated depreciation-Machine 13125
July 1,2024 Cash 105000
Accumulated depreciation-Machine (26250*4+13125) 118125
Gain on sale of machine 13125
Machine 210000
July 1,2024 Cash 88200
Accumulated depreciation-Machine 118125
Loss on sale of machine 3675
Machine 210000
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