Petey’s Printing discards a copier that it purchased for $100,000. If the machine’s accumulated depreciation is $99,000, what would the journal entry be to record the disposal?
Explanation
Answer - B - The following entries would be made to record the copier being destroyed:
Debit Accumulated Depreciation of Copier, $99,000
Credit Copier, $100,000;
Debit Loss on Disposal of Copier, $1,000.
Key Takeaway: When in doubt, use T-accounts to illustrate the transaction. This will eliminate answers that are not possible, due to the total of the debits not equaling the total of the credit entries.
