Question

Equipment acquired several years ago by a capital projects fund and reported in the governmental activities statement of net position at a net book value of $2,000 was sold for $1,000 cash. Cash is collected in the General Fund. Journal entries are necessary in the general journals of the

Answer 1

To record the sale of equipment in the capital projects fund and the collection of cash in the General Fund, journal entries are necessary: Debit Cash $1,000, Credit Equipment $2,000, Credit Gain on Sale of Equipment $1,000; Debit Transfer In $1,000, Credit Cash $1,000.

Step-by-step explanation:

To record the sale of equipment in the capital projects fund and the collection of cash in the General Fund, the following journal entries are necessary:

1. General Journal: Debit Cash $1,000, Credit Equipment $2,000, Credit Gain on Sale of Equipment $1,000
2. General Journal: Debit Transfer In $1,000, Credit Cash $1,000

The first entry records the sale of equipment, recognizing a gain on the sale. The second entry records the transfer of cash from the General Fund to the capital projects fund.