Ottawa Corporation owns machinery that cost $29,280 when purchased on July 1, 20

Question

Ottawa Corporation owns machinery that cost $29,280 when purchased on July 1, 2011. Depreciation has been recorded at a rate of $3,514 per year, resulting in a balance in accumulated depreciation of $12,299 at December 31, 2014. The machinery is sold on September 1, 2015, for $15,372. Prepare journal entries to (a) update depreciation for 2015 and (b) record the sale. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Explanation / Answer

Journal entries :

Date accounts & explanation Debit Credit 2015 sep 1 Depreciation expenses a/c (3514*8/12) 2343 Accumlated depreciation a/c 2343 (To record depreciation) 2015 sep 1 Cash a/c 15372 Accumlated dep (12299+2343) 14642 Profit on sale of machine 734 Machinery a/c 29280 (To record sale of machine )

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