A piece of factory machinery has a book cost of $150,000 and accumulated depreciation of $120,000.

Assuming a company sells it for $40,000 and receives the money instantly, what entry would be needed?

Question 7 options:

Debit Credit Accumulated Depreciation 120,000 Cash 40,000 Machinery 150,000 Gain on Sale 10,000

Debit Credit Accumulated Depreciation 120,000 Accounts Receivable 40,000 Machinery 150,000 Gain on Sale 10,000

Debit Credit Accumulated Depreciation 120,000 Accounts Receivable 40,000 Loss on Sale 10,000 Machinery 170,000

Debit Credit Machinery 150,000 Cash 40,000 Accumulated Depreciation 120,000 Gain on Sale 70,000