Response to the following problem:
Equipment with an estimated residual value at acquisition of $15,000 was sold on December 31, 2013, for $20,000 cash. The following data were available at the time of sale:
Acquisition cost $100,000 Accumulated depreciation on December 31, 2013, after adjustment 85,000
When this transaction is recorded, it should include a
debit of $20,000 to the Accumulated Depreciation account.
debit of $80,000 to the Loss on Disposal account.
credit of $20,000 to the Equipment account.
credit of $5,000 to the Gain on Disposal account.