Abo purchased a truck at the beginning of 2018 for
$140,000. they sold the truck at the end of 2019 for
$95,000. if the expected useful life of the truck was six
years with a residual value of $20,000 and abo uses
straight‐line depreciation, which of the following is true
regarding the entry to record the sale of the truck?
a. credit gain $5,000.
b. debit loss $5,000.
c. credit accumulated depreciation $40,000.
d. credit equipment $100,000.

B. Debit Loss $5,000.

Explanation:

depreciation per year under straigh-line method:

depreciation per year: 20,000

book value at 2019 year-end:

140,000 - 20,000 x 2 = 100,000

disposal value:                95,000

loss for                               5,000

loss at diposal:                      5,000  debit

cash                                      95,000 debit

accumulated depreciation  40,000 debit

                truck                                       140,000 credit