Final answer:
When disposing of an asset with straight-line depreciation, the accounts involved are Sales Income, Gain/loss on sale of an asset, Depreciation Expense, Fixed Assets, and Accumulated Depreciation. Straight-line depreciation results in an equal depreciation expense each year.
Step-by-step explanation:
The appropriate accounts used to record the disposal of an asset, assuming a 5-year estimated service life and straight-line depreciation, would be:
- Sales Income
- Gain/loss on sale of an asset
- Depreciation Expense
- Fixed Assets
- Accumulated Depreciation
When an asset is sold, its cost and the related accumulated depreciation are removed from the books. If the sale price is different from the book value (the asset's cost minus accumulated depreciation), a gain or loss on sale is recorded. Straight-line depreciation means the depreciation expense is the same each year, leading to an always positive, steadily decreasing book value over time.