Problem:
Rental receipts (cash) received $43,000
Cash paid for insurance $ 5,000
Cash Paid for taxes $ 6,000
Cash received from sale of used equipment $11,000
Of the rental receipts collected, $2,000 was reported as rent receivable at September 30, and $3,500 was a prepayment of November's rent. An insurance premium of $1,000 was owed at the end of October. Taxes of $1,000 and $700 were owed at October 31, respectively. Equipment sold in October had a book value (cost minus accumulated depreciation of $12,200 at the time of sale.
Required
1. Determine rental income for October 2005
2. Determine insurance expense for October 2005
3. Determine tax expense for October 2005
4. Assuming the accumulated depreciation on the equipment sold was $1,300 what is the appropriate journal entry to record the used equipment?