Wildhorse Corporation owns machinery that cost $23,200 when purchased on July 1,

Question

Wildhorse Corporation owns machinery that cost $23,200 when purchased on July 1, 2014. Depreciation has been recorded at a rate of $2,784 per year, resulting in a balance in accumulated depreciation of $9,744 at December 31, 2017. The machinery is sold on September 1, 2018, for $6,032 Prepare journal entries to (a) update depreciation for 2018 and (b) record the sale. (Round answers to O decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. I no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) No. Account Titles and Explanation Debit Credit

Explanation / Answer

a.) Depreciation for the year = $2,784

Journal Entry:

Depreciation on Machinery $2,784

Accumulated Depreciation $2,784

b.) Machinery is sold on Sep 1 for $6,032

Journal Entry:

Cash $6,032

Accumulated Depreciation $12,528

Loss on Sale $4,640

Machine $23,200

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