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. Journal entries are necessary in the general journals of the

a. General Fund and governmental activities
b. Capital projects fund and governmental activities
c. General Fund, capital projects fund, and enterprise fund
d. General Fund, capital projects fund, and governmental activities

Answer 1

The journal entries necessary are Debit Cash $1,000, Credit Other Financing Sources - Sale of Equipment $1,000 in the General Fund, and Debit Accumulated Depreciation Equipment $2,000, Credit Equipment $2,000, Debit Cash $1,000, Credit Gain on Sale of Equipment $1,000 in the Governmental Activities and Capital Projects Fund.

Step-by-step explanation:

The journal entries necessary in this case would be:

a. General Fund: Debit Cash $1,000, Credit Other Financing Sources - Sale of Equipment $1,000.

Governmental Activities: Debit Accumulated Depreciation Equipment $2,000, Credit Equipment $2,000; Debit Cash $1,000, Credit Gain on Sale of Equipment $1,000.

b. Capital Projects Fund: Debit Cash $1,000, Credit Other Financing Sources - Sale of Equipment $1,000.

Governmental Activities: Debit Accumulated Depreciation Equipment $2,000, Credit Equipment $2,000; Debit Cash $1,000, Credit Gain on Sale of Equipment $1,000.

Therefore, the correct answer is d. General Fund, capital projects fund, and governmental activities.