Question

a company purchased a machine for $700,000. the accumulated depreciation on the machine is now $120,000. the machine is junked. this means the machined is thrown away. which journal entry is prepared to record the disposal? (disposal means the asset is no longer used by the business and is removed from the assets).

Answer 1

The journal entry to record the disposal of the machine would include debiting the accumulated depreciation account and the disposal account, and crediting the machine account.

Step-by-step explanation:

The journal entry to record the disposal of the machine would include debiting the accumulated depreciation account and the disposal account, and crediting the machine account. Since the accumulated depreciation on the machine is $120,000, the journal entry would be:

1. Debit Accumulated Depreciation ($120,000)
2. Debit Disposal Account ($580,000)
3. Credit Machine Account ($700,000)

This journal entry reflects the removal of the machine from the company's assets by reducing the machine account and recognizing the accumulated depreciation and disposal of the machine.