On October 1, 2021, Walmart decides to sell a piece of equipment they purchased on January 1, 2018 for $120,000. At the time of purchase, Walmart estimated the equipment was going to have an estimated useful life of 5 years and an estimated residual value of $35,000. The company uses straight-line depreciation. The following table shows the balance of relevant accounts on December 31, 2020. Note that depreciation has NOT been recorded for 2021.

	Debit	Credit
Equipment	$120,000
Accumulated Depreciation - Equipment		$51,000

To do...

1. Prepare the journal entry to record the depreciation expense for 2021.

2. Prepare the journal entry to record the disposition on October 1, 2020 assuming the equipment was sold for $50,000 cash.

3. Prepare the journal entry to record the disposition on October 1, 2020 assuming the equipment was exchanged for $40,000 cash and a machine valued at $35,000

Write your calculations below:

Part 1

	General Journal
Date	Account Titles and Explanation	Debit	Credit

Part 2

	General Journal
Date	Account Titles and Explanation	Debit	Credit

Part 3

	General Journal
Date	Account Titles and Explanation	Debit	Credit

Calculations: