Final answer:
The Delta River Company's sale of equipment would include a credit to the Equipment account for the original cost and a debit to Accumulated Depreciation for the accumulated amount. Since the equipment was sold for less than its book value, there would also be a debit to a loss account for the difference, which in this case is $3,000.
Step-by-step explanation:
The student asked about the journal entry needed to record the transaction of Delta River Company selling manufacturing equipment. The equipment had a cost of $44,000 and accumulated depreciation of $32,000. It was sold for $9,000. To answer the student's multiple-choice question, when the equipment is sold, the following journal entries are typically made:
- Debit to Accumulated Depreciation for $32,000 (B)
- Debit to Cash for the sale price which is $9,000
- Credit to the Equipment account for the original cost, which in this case is $44,000
- Debit or Credit to a Gain or Loss account for the difference
In this scenario, the gain or loss is calculated as the sale price minus the book value of the equipment (cost minus accumulated depreciation). The book value of the equipment is $12,000 ($44,000 cost - $32,000 accumulated depreciation). Since the equipment was sold for $9,000, this results in a loss of $3,000 ($12,000 book value - $9,000 sale price). Thus, a debit to a loss account for $3,000 (D) is the correct entry for the difference.