Oriole Company sells office equipment on July 31, 2017, for $21,900 cash. The office equipment originally cost $76,780 and as of January 1, 2017, had accumulated depreciation of $36,270. Depreciation for the first 7 months of 2017 is $4,070. Prepare the journal entries to (a) update depreciation to July 31, 2017, and (b) record the sale of the equipment. (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.)

Question

Arely Meadows

Business

6 June, 02:03

Oriole Company sells office equipment on July 31, 2017, for $21,900 cash. The office equipment originally cost $76,780 and as of January 1, 2017, had accumulated depreciation of $36,270. Depreciation for the first 7 months of 2017 is $4,070. Prepare the journal entries to (a) update depreciation to July 31, 2017, and (b) record the sale of the equipment. (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.)

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Fresier · Answer 1

The journal entries are shown below:

a. Depreciation expense A/c Dr $4,070

To Accumulated Depreciation - Equipment A/c $4,070

(Being depreciation expense is recorded)

b. Cash A/c Dr $21,900

Accumulated Depreciation - Equipment A/c $40,340

Loss on sale of an equipment $14,540

To Equipment $76,780

(Being sale of equipment is recorded and the remaining balance is debited to the loss on sale of an equipment)

The accumulated depreciation is computed below:

= $36,270 + $4,070

= $40,340