Question

Diaz Company owns a machine that cost $126,200 and has accumulated depreciation of $90,400. Prepare the entry to record the disposal of the machine on January 1 in each seperate situation.

1. The machine needed extensive repairs and was not worth repairing. Diaz disposed of the machine, receiving nothing in return.
2. Diaz sold the machine for $15,600 cash.
3. Diaz sold the machine for $35,800 cash.
4. Diaz sold the machine for $40,800 cash.

Journal entry worksheet

• Record the disposal of the machine receiving nothing in return.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Jan 01

Answer 1

No	Account	Debit	Credit
A	Accumulated Depreciation - Machine	90,400
	Loss on disposal		35,800
	Machine		126,200
B	Cash	15,600
	Accumulated Depreciation - Machine	90,400
	Loss on sale	20,200
	Machine		126,200
C	Cash	35,800
	Accumulated Depreciation - Machine	90,400
	Machine		126,200
D	Cash	40,800
	Accumulated Depreciation _Machine	90,400
	Gain on sale		5,000
	Machine		126,200