$02-$Ch$\mathrm{.}09-$Challenge Exercise $4$

LO $3$

Grace Company owns equipment that cost $$70,000$ when purchased on January $1,2019.$ It has been depreciated using the straight$-$line method based on estimated salvage value of $$7,000$ and an estimated useful life of $5$ years.

Instructions:

Prepare Grace Company's journal entries to record the sale of the equipment in these four independent situations. Update depreciation on assets disposed of at time of sale.

$($a$)$ Sold for $$40,000$ on January $1,2022$

$($b$)$ Sold for $$40,000$ on April $1,2022.$

$($c$)$ Sold for $$15,000$ on January $1,2022$

$($d$)$ Sold for $$15,000$ on September $1,2022$

$($e$)$ Repeat $($a$),$ assuming Grace uses double$-$declining balance depreciation

$($f$)$ Repeat $($c$),$ assuming Grace uses double$-$declining balance depreciation.