Bengali Petroleum converted one of its factries from oi refining to ethanol manufacaturing in 2008. This decision, advocated by new management, came exactlyone yea after the purchase of oi-specific machinery for $12,000. These machines, which now have to be removed, were expected to last five years with a salvage value of $2000. Bengail uses the double-declining balance method to depeciate the machines.

Fortunately, Bengail was able to find a buyer willing to pay $7,000 for the oil specific machinery.

Prepare journal entry recording.



Accumulated Depreciation 1000
Cash 2150
Equipment 3000
Loss of disposal fixed asset