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30 September, 06:21

Ivanhoe Company sells office equipment on July 31, 2017, for $22,410 cash. The office equipment originally cost $81,920 and as of January 1, 2017, had accumulated depreciation of $37,600. Depreciation for the first 7 months of 2017 is $4,580. Prepare the journal entries to (a) update depreciation to July 31, 2014, and (b) record the sale of the equipment.

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  1. 30 September, 06:37
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    The journal entries are shown below:

    Explanation:

    The journal entries are shown below:

    a. Depreciation Expense A/c Dr $4,580

    To Accumulated Depreciation - Office equipment A/c $4,580

    (Being depreciation expense is recorded)

    b. Cash A/c Dr $22,410

    Accumulated Depreciation - Office equipment A/c $42,180 ($37,600 + $4,580)

    Loss on Disposal of Office equipment A/c $17,330

    To Office equipment A/c $81,920

    (Being sale of machinery is recorded and the remaining balance is debited to the loss on Disposal of office equipment A/c)
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