Question

Blossom Company sells equipment on September 30, 2020, for $20,100 cash. The equipment originally cost $72,800 and as of January 1, 2020, had accumulated depreciation of $42,100. Depreciation for the first 9 months of 2020 is $5,45. Prepare the journal entries to (a) update depreciation to September 30, 2015, and (b) record the sale of the equipment.

Answer 1

Date Account titles and explanation Debit Credit

30/09/2020 Depreciation expense $5,450

Accumulated depreciation $5,480

(To record depreciation expense)

30/09/2020 Accumulated depreciation $47,550

Cash $20,100

Loss on sale of equipment $5,230

Equipment $72,880

(To record sale of equipment)