Oregon Adventures purchased equipment for $80,000. They sold the equipment at the end of three years for $45,000

Oregon Adventures purchased equipment for $80,000. They sold the equipment at the end of three years for $45,000. If the expected useful life of the equipment was seven years with a residual value of $10,000, and they use straight-line depreciation, which of the following is true regarding the entry to record the sale of the equipment?

A) Debit Loss $5,000.

B) Credit Gain $5,000.

C) Credit Accumulated Depreciation $40,000.

D) Credit Equipment $5,000.

Answer: A

ABO purchased a truck at the beginning of 2021 for $140,000. They sold the truck at the end of 2022 for $95,000. If the expected useful life of the truck was six years with a residual value of $20,000 and ABO uses straight-line depreciation, which of the following is true regarding the entry to record the sale of the truck?

A) Credit Gain $5,000.

B) Debit Loss $5,000.

C) Credit Accumulated Depreciation $40,000.

D) Credit Equipment $100,000.

Answer: B

Career Services, Incorporated sold some office equipment for $52,000 on December 31, 2021. The journal entry to record the sale would include which of the following if the original cost of the equipment was $80,000 with a residual value of $5,000 and a useful life of 10 years? Assume the machine was purchased on January 1, 2018, and depreciated using the straight-line method.

A) Gain of $2,000.

B) Loss of $9,500.

C) Gain of $9,500.

D) Loss of $2,000.

Answer: A