ACCT 201 Selling Fixed Assets

Jaguar Corporation purchased a machine that had an original cost of $60,000 and an estimated residual value of $10,000. The useful life was expected to be 8 years and straight-line depreciation is used. At December 31, 2006 (Jaguars annual year-end), the book value of the machine was $35,000. Jaguar Corporation sold the machine for $32,000 cash on October 1, 2007.

Required: (A) Prepare the journal entry to record depreciation expense for 2007 at Oct 1, 2007 for the machine. Round the amount to the nearest dollar. (B) Prepare the journal entry to record the sale of the machine on Oct. 1, 2007.