Question

When a company sells machinery at a price equal to its book value, this transaction would be recorded with an entry that would include the following:

a. debit Cash and Accumulated Depreciation; credit Machinery
b. debit Cash and Depreciation Expense; credit Accumulated Depreciation
c debit Cash and Machinery; credit Accumulated Depreciation
d. debit Machinery; credit Cash and Accumulated Depreciation

Answer 1

The correct entry for a company selling machinery at its book value includes debiting Cash and Accumulated Depreciation, and crediting Machinery, reflecting the correct removal of the asset from the accounts.

Step-by-step explanation:

When a company sells machinery at a price equal to its book value, the correct accounting entry would be: debit Cash for the amount received, debit Accumulated Depreciation for the total accumulated depreciation on the machinery, and credit Machinery for the original cost of the equipment.

This records the removal of the asset and its accumulated depreciation from the company's books, while recognizing the cash received from the sale.