Question
Disposal of Fixed Asset Perfect Auto Rentals sold one of its cars on January 1. Perfect had acquired the car 2 years earlier for $13,500.
Disposal of Fixed Asset
Perfect Auto Rentals sold one of its cars on January 1. Perfect had acquired the car 2 years earlier for $13,500. At acquisition, Perfect assumed that the car would have an estimated life of 3 years and a residual value of $3,000. Assume that Perfect had properly used the straight-line depreciation method in previous years.
Required:
Prepare the journal entry to record the sale of the car assuming the car sold for (a) $6,500 cash, (b) $4,000 cash, and (c) $7,100 cash. The company recorded the car as equipment. If an amount box does not require an entry, leave it blank.
| a. | Accumulated DepreciationCashDepreciation Expense-EquipmentEquipmentLoss on Disposal of Property, Plant, and Equipment | - Select - | - Select - |
| Accumulated DepreciationDepreciation Expense-EquipmentEquipmentGain on Disposal of Property, Plant, and EquipmentLoss on Disposal of Property, Plant, and Equipment | - Select - | - Select - | |
| Accumulated DepreciationCashDepreciation Expense-EquipmentEquipmentLoss on Disposal of Property, Plant, and Equipment | - Select - | - Select - | |
| b. | Accounts PayableCashDepreciation Expense-EquipmentEquipmentGain on Disposal of Property, Plant, and Equipment | - Select - | - Select - |
| Accounts PayableAccumulated DepreciationDepreciation Expense-EquipmentEquipmentSupplies | - Select - | - Select - | |
| Accounts PayableDepreciation ExpenseEquipmentGain on Disposal of Property, Plant, and EquipmentLoss on Disposal of Property, Plant, and Equipment | - Select - | - Select - | |
| Accumulated DepreciationDepreciation Expense-EquipmentEquipmentGain on Disposal of Property, Plant, and EquipmentLoss on Disposal of Property, Plant, and Equipment | - Select - | - Select - | |
| c. | CashDepreciation Expense-EquipmentEquipmentGain on Disposal of Property, Plant, and EquipmentLoss on Disposal of Property, Plant, and Equipment | - Select - | - Select - |
| Accumulated DepreciationDepreciation Expense-EquipmentEquipmentGain on Disposal of Property, Plant, and EquipmentLoss on Disposal of Property, Plant, and Equipment | - Select - | - Select - | |
| Accumulated DepreciationCashDepreciation Expense-EquipmentGain on Disposal of Property, Plant, and EquipmentLoss on Disposal of Property, Plant, and Equipment | - Select - | - Select - | |
| Accumulated DepreciationCashEquipmentGain on Disposal of Property, Plant, and EquipmentLoss on Disposal of Property, Plant, and Equipment | - Select - | - Select - |
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