The journal entry to retire old equipment that is not fully depreciated includes a:Multiple select question.debit to losscredit to equipmentdebit to cashcredit to lossdebit to accumulated depreciation
Question
The journal entry to retire old equipment that is not fully depreciated includes a:Multiple select question.debit to losscredit to equipmentdebit to cashcredit to lossdebit to accumulated depreciation
Solution
The journal entry to retire old equipment that is not fully depreciated would include:
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Debit to Loss on Disposal of Equipment: This is because the equipment is not fully depreciated, meaning its book value (cost - accumulated depreciation) is more than its salvage value. The difference is recorded as a loss.
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Credit to Equipment: This is to remove the cost of the old equipment from the books.
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Debit to Accumulated Depreciation: This is to remove the accumulated depreciation related to the old equipment from the books.
So, the correct options are:
- Debit to loss
- Credit to equipment
- Debit to accumulated depreciation
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