Final answer:
The journal entry for selling fixed assets below book value involves acknowledging the cash received, removing the depreciated asset from the books, and recognizing any loss from the sale.
Step-by-step explanation:
The question refers to the journal entry (JE) required when selling fixed assets below book value, which results in a loss. In accounting, recording the sale of an asset below its book value involves acknowledging both the cash received and the loss incurred. The journal entry would generally include debiting cash for the amount received, debiting accumulated depreciation for the amount accumulated up to the date of sale, debiting a loss on sale of assets account for the difference between the book value and the sale price (if the sale price is lower), and crediting the asset account for its original cost.
To illustrate, if a company sells a fixed asset with a book value of $100,000 (original cost minus accumulated depreciation) for $80,000, the loss would be $20,000. The entry would be: Debit Cash $80,000, Debit Accumulated Depreciation (to remove it from books), Credit Fixed Asset $100,000 (to remove it from books), and Debit Loss on Sale of Fixed Assets $20,000.