[Enzo 3]

Oct 2. Sold office equipment in exchange for $60,000 cash plus receipt of a $40,000, 120-day, 6% note. The equipment had cost $140,000 and had accumlated depreciation of $25,000 as of October 1.

Thanks

[ROLCAM]

JOURNAL 1 represnts the original position.

DEBIT Equipment Account 120,000
CREDIT Provision for Depreciation A/c 25,000
CREDIT Capital Account 95,000

Being offoce equipment at cost in the accounts.

_____________________________________

JOURNAL 2. Sale of Equipment.

DEBIT Cash Account 60,000
DEBIT 6% Note Account 40,000
CREDIT Equipment Account 120,000
DEBIT Provision for Depreciation A/c 25,000
CREDIT Gain on Sale of Equip A/c 5,000.

Being the sale of Office Equipment.