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On January 2,2017,Barnes Enterprises purchased equipment for $42,000 cash,expecting the equipment to remain in service for five years,with a $4,000 residual value.Barnes uses straight-line depreciation.On April 30,2019,Barnes sold the equipment for $20,000 cash.
Requirement:
Prepare the journal entries to record the purchase of the equipment; depreciation for 2017,2018,and 2019; and the sale of the equipment.Omit explanations and round to the nearest dollar.
Residual Value
The estimated amount that an asset is worth at the end of its useful life.
Annual Depreciation Expense
Annual depreciation expense is the portion of the cost of a fixed asset that is expensed each year over its useful life, reflecting its decrease in value.
Straight-Line Depreciation
A method of allocating the cost of an asset evenly over its useful life, indicating how much of the asset's value has been used up each year.
Accumulated Depreciation Balance
The total amount of depreciation expense that has been recorded against a fixed asset since it was acquired.
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