December 11 Used store equipment was sold for $320 cash. The equipment originall

Question

December 11

Used store equipment was sold for $320 cash. The equipment originally cost $1250 and depreciation to September 30 of this year (the end of the third quarter) totals $820. The asset depreciates on a straight line basis at a rate of $20 per month and depreciation is calculated to the nearest month. Two Journal entries are required. At the invoice prompt type ASALE   

This is my journal entry: BU

12/11 101 Cash $320 (DR)

132 Accumulated Depreciation, Store Equipment $860 (DR)

721 Gain on Sale of Asset $70 (DR)

131 Store Equipment $1250 (CR)

* Checking numbers my account (610 )Depreciation Expense, Store equipment is under $40 and my account (132) accumulate depreciation, equipment is over $40. I believe I should have depreciated 2 more months until it the equipment was sold. (OCT and NOV (2*20=40) but I have to split the journal entry into 2 and correct the first.

Journal Entry

Explanation / Answer

Journal entry for sale of used store equipment is as follows (Amount in $)

The accumulated depreciation on store equipment given in the question is $820 which means the store equipment would be used for nearly 41 months ($820/$20 per month)

Date Particulars Debit Credit 30 september Cash Dr. 320 Accumulated Depreciation, Store Equipment Dr. 820 Loss on sale of store equipment (Bal. fig.) Dr. 110 To Store Equipment 1,250

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.