Spa Sources Corporation Purchased a Machine That Had an Original

question 131

Essay

Spa Sources Corporation purchased a machine that had an original cost of $60,000 and an estimated residual value of $10,000.The useful life was expected to be 8 years and straight-line depreciation is used.At the end of 2019,the book value of the machine was $35,000.Spa Sources sold the machine for $32,000 cash on October 1,2020.
A.Prepare the journal entry to record depreciation for 2020 up to the date of sale.
B.Prepare the journal entry to record the sale of the machine.

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Definitions:

Electric Bill

A monthly charge for the consumption of electricity, typically issued by an electricity provider.

Accounting Equation

The foundational equation in accounting, representing the relationship between assets, liabilities, and equity (Assets = Liabilities + Equity).

Supplies

Consumable items or materials used in the daily operations of a business or for the completion of a task.

Withdrawal

The act of removing funds from an account or the act of taking out resources or assets from business use by the owners.