Martinez owns machinery that cost $87,000 with accumulated depreciation of $40,000. the company sells the machinery for cash of $42,000. the journal entry to record the sale would include:

The journal entry to record the sale would include cash account, accumulated depreciation, loss on the sale of machinery, and machinery account. Cash account, accumulated depreciation, original on the sale of machinery,are debited by $42,000, $40,000, and $5,000, respectively. The machinery account is credited by $87,000.

Further Explanation:

Journal entry:

The journal entry refers to the method of recording the transactions of the business entity in the general journal. The transactions are recorded in accordance with debit and credit balances. All the transactions are recorded according to date and time.

Depreciation:

Depreciation is the cost allocation process in which cost,Cash life of the asset. A long-lived asset is those assets that have a period of life for more than five years. It is an operating expense. Depreciation does not have any impact on cash flow. There are three methods for calculating the depreciation: straight-line method, diminishing method, and units of production method. The real price of the asset cannot, with the help of depreciation.

Disposal of the asset:

It refers to the sale, retirement, or exchange of the plant, property, or equipment. The gain or loss on the disposal of the asset is calculated by deducting sales proceeds from the carrying amount. The carrying amount is calculated as a difference between the cost of the asset and accumulated depreciation.

Journal entry to record the sale of machinery:

Refer to Table: (1) for journal entry.

The loss on the sale of machinery can be computed by $87,000-$40,000-$42,000 ($5,000).

Learn more:

1.Learn more about journal entry of purchase

2.Learn more about depreciation

3.Learn more about journal entry

Answer details:

Grade: Middle School

Subject: Accounting

Chapter: Journal Entry

Keywords: Martinez, owns machinery, cost $87,000, sells, cash, journal entry, record, the sales, would include, cash account, accumulated depreciation account, loss on the sale of machinery, machinery.

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.

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