The Empire is in desperate need of cash to fund the continuing war with the Rebe

Question

The Empire is in desperate need of cash to fund the continuing war with the Rebellion so the Emperor and imperial officers decide to sell the death star and they put it on Craiglist.com. The death star has a fair market value of 375 millins and they are able to find a buyer who pays them 400$ million. At the time of sale, the death star is listed on the emppire’s balance sheet for 418$ millions. The empire had purchased the death star for 550$ millions and was depreciating it over 25 years using the straight line method.

Record the Journal entry for the sale of the death star on December 18.2015.

(also please explain how did you caluclate the Accumlated Depreciation?)

Explanation / Answer

Journal entry for the sale of death star

1) cash account Dr 400

Loss on sale of asset Dr 18

To death star. 418

( being sale of the death star recorded and the corresponding loss on sale is recorded)

Accumulated depreciation = 550-418 = 132

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