Funseth Farms Inc. purchased a tractor in 2018 at a cost of $30,000. The tractor was sold for $3,000 in 2021. Depreciation recorded through the disposal date totaled $26,000. (1) Prepare the journal entry to record the sale. (2) Now assume the tractor was sold for $10,000; prepare the journal entry to record the sale

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DanzeloDaBeast9002 DanzeloDaBeast9002

19-11-2021
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Funseth Farms Inc. purchased a tractor in 2018 at a cost of $30,000. The tractor was sold for $3,000 in 2021. Depreciation recorded through the disposal date totaled $26,000. (1) Prepare the journal entry to record the sale. (2) Now assume the tractor was sold for $10,000; prepare the journal entry to record the sale

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anthougo anthougo · Answer 1 · 2021-12-03T09:13:01+01:00

1. The journal entries that Funseth Farms Inc. will record for the sale of the tractor are as follows:

Debit Sale of Tractor $30,000

Credit Tractor $30,000

To transfer the Tractor account to Sale of Tractor account.

Debit Accumulated Depreciation $26,000

Credit Sale of Tractor $26,000

To transfer the accumulated depreciation to Sale of Tractor account.

Debit Cash $3,000

Credit Sale of Tractor $3,000

To record the cash receipts from the sale.

Debit Loss from Sale $1,000

Credit Sale of Tractor $1,000

To record the loss from the sale.

2) If the tractor was sold for $10,000, the journal entries are as follows:

Debit Sale of Tractor $30,000

Credit Tractor $30,000

To transfer the Tractor account to Sale of Tractor account.

Debit Accumulated Depreciation $26,000

Credit Sale of Tractor $26,000

To transfer the accumulated depreciation to Sale of Tractor account.

Debit Cash $10,000

Credit Sale of Tractor $10,000

To record the cash receipts from the sale.

Debit Sale of Tractor $6,000

Credit Gain from Sale $6,000

To record the gain from the sale.

Data Analysis and Calculations:

Cost of Tractor in 2018 = $30,000

Accumulated Depreciation = $26,000

Proceeds from sale = $3,000

Loss from Sale = $1,000

Accumulated Depreciation $26,000 Sale of Tractor $26,000

Sale of Tractor $30,000 Tractor $30,000

Cash $3,000 Sale of Tractor $3,000

Loss from Sale $1,000 Sale of Tractor $1,000

2) If the tractor was sold for $10,000, the journal entries are as follows:

Accumulated Depreciation $26,000 Sale of Tractor $26,000

Sale of Tractor $30,000 Tractor $30,000

Cash $10,000 Sale of Tractor $10,000

Sale of Tractor $6,000 Gain from Sale $6,000

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