Ottawa Corporation owns machinery that cost $22,700 when purchased on July 1, 20

Question

Ottawa Corporation owns machinery that cost $22,700 when purchased on July 1, 2011. Depreciation has been recorded at a rate of $2,724 per year, resulting in a balance in accumulated depreciation of $9,534 at December 31, 2014. The machinery is sold on September 1, 2015, for $5,902. Prepare journal entries to (a) update depreciation for 2015 and (b) record the sale. (Round answers to 0 decimal places, e.g. 5,275. 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.)

No. Account Titles and Explanation Debit Credit

(a)

(b)

Explanation / Answer

NO ACCOUNT TITLE & EXPLANATION DEBIT CREDIT A. DEPRICIATION EXPENSES ($2724 / 12) * 8 $1816 ACCUMULATED DEPRICIATION $1816 B. ACCUMULATED DEPRICIATION ($9534 + $1816) $11350 CASH $5902 LOSS ON DISPOSAL $5448 MACHINARY $22700

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