Hey, I just had a quick question

If a company purchases a machine for $178k (useful life 6 years, $14,000 salvage value) and it's destroyed in a fire at the end of the 5th year, if the insurance company then pays $30,000 to settle the loss, what would the journal entry/entries look like? I was thinking somewhere along the lines of having the acc. Depreciation and the cost being equal since the book value might be 0? And having a second entry for the insurance claim? Not sure if that's the right line of thinking though...

Thanks

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Originally Posted by bloodbrothers524

Hey, i just had a quick question

If a company purchases a machine for $178k (useful life 6 years, $14,000 salvage value) and it's destroyed in a fire at the end of the 5th year, if the insurance company then pays $30,000 to settle the loss, what would the journal entry/entries look like? I was thinking somewhere along the lines of having the acc. depreciation and the cost being equal since the book value might be 0?? and having a second entry for the insurance claim? not sure if that's the right line of thinking though...

Thanks

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Never mind the question, I was missing the $4000 that came from installation and preparation costs.