Final answer:
A truck with a cost of $72,000 and accumulated depreciation of $11,000 sold for $57,000 will result in a journal entry with a debit to Cash for $57,000, debit to Loss on Sale of Truck for $4,000, credit to Accumulated Depreciation for $11,000, and credit to the Truck account for $72,000.
Step-by-step explanation:
The question relates to recording the sale of an asset in accounting. A truck that was initially purchased for $72,000 and has accumulated depreciation of $11,000 was sold for $57,000. The journal entry to record this transaction will include: debiting Cash for $57,000 (which represents the money received), crediting Accumulated Depreciation for $11,000 (to remove the depreciation associated with the truck), and crediting the Truck account for $72,000 (to remove the truck's original cost from the books). Finally, the difference, which represents a gain or loss on the sale, is calculated and recorded. Since the truck's book value is $72,000 - $11,000 = $61,000, and it sold for $57,000, there is a loss of $4,000. This loss is debited to indicate that it reduces income.
Here's how the journal entry would look:
- Debit Cash $57,000
- Debit Loss on Sale of Truck $4,000
- Credit Accumulated Depreciation - Truck $11,000
- Credit Truck $72,000