7.A machine was purchased at a cost of $52,000. The equipment had an estimated useful life of seven years and a residual value of $3,000. Assuming the equipment was sold at the end of Year 6 for $14,000 cash, which of the following will be included in the journal entry? (Assume the straight-line depreciation method.)

a. a credit to Loss on Sale of Asset

b. a credit to Cash

c. a debit to Accumulated DepreciationEquipment

d. a debit to Gain on Sale of Asset

8.

A machine was purchased at a cost of $78,000. The equipment had an estimated useful life of five years and a residual value of $3,000. Assuming the equipment was sold at the end of Year 4 for $8,000, determine the gain or loss on the sale of equipment. (Assume the straight-line depreciation method.)

a.a loss of $18,000

b.a loss of $10,000

c.a gain of $10,000

d.a gain of $18,000