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Assume the tractor was sold for 16,600 instead of21,000. Record the sale.

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Final answer:

To record the sale of a tractor for $16,600, an accounting entry would debit the cash account and credit the tractor inventory or asset account. If sold below book value, one would record a loss and adjust accumulated depreciation or the asset account.

Step-by-step explanation:

The question pertains to the recording of a sale of a tractor in a business context. The original sale price of the tractor was expected to be $21,000, but the actual sale price ended up being $16,600. The accounting transaction to record the sale at the lower amount would involve a debit to the cash account and a credit to the sales revenue or tractor inventory account, depending on whether the tractor was a capital asset or inventory for sale. If the tractor was sold for less than its book value or cost, there might also be a loss reported on the sale.

The journal entries would look something like:

  • Debit Cash $16,600 (to record the inflow of cash)
  • Credit Tractor Inventory or Asset Account $16,600 (to remove the tractor from inventory or assets)

If there is a loss due to the sale price being lower than the tractor's book value, an additional entry to record the loss might be needed:

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