Property Journal Entries. Ames Corp. purchased equipment for cash of $55,000 and placed it in service at the beginning of the year. The equipment has a residual value of $7,000 and a useful life of 3 years. Straight-line depreciation is used. At the end of the second year, Ames sold the equipment for cash of $20,000. Journalize the following:
a. Purchase of equipment.
b. Depreciation for Year 1
c. Depreciation for Year 2
d. Sale of equipment.
Depreciation for Partial Year. Assume the same as problem 4 above, except that the machine was placed into service on October 1 of Year one.
a. Purchase of equipment.
b. Depreciation for Year 1
c. Depreciation for Year 2
d. Sale of equipment.