answer for all please Review- Critical thinking. We do not yet know if the grill

Question

answer for all please

Review- Critical thinking. We do not yet know if the grill is sold at a gain or loss.] Dottie's Diner bought a new electric grill and planned to use it in the restaurant for 10 years. The grill was depreciated every year, using straight-line depreciation. After using the grill for 8 years, Dottie's Diner sold the grill. Based on this information alone, we can be certain that the journal entry to record the sale of the grill and its REMOVAL from Dottie's accounts will include Credit to the asset (equipment) account Credit to gain on sale of the grill Credit to the accumulated depreciation (contra-asset) account Debit to loss on sale of the grill O O O O

Explanation / Answer

1. Credit to asset (equipment) account

We do not know if the equipment is sold on a gain or loss. Therefore, it journal entry cannot be posted as credit to gain or loss on sale of asset, and sale of asset is always debit (not credit) to accumulated depreciation

2. Periodic interest expense on the $ 10000 "Note payable" that Bentley owes the bank.

Fixed cost is independent of sales volume. Interest expense is a fixed cost on the Note payable , unless Bentley completely payoff the debt.

3. Current liabilities

Amound withheld to remit to IRS or to pay for the insurance are payroll liabilities, which the employer is expected to pay off. Unless paid off, these items remain outstanding in the books of accounts..

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