Here are selected 2017 transactions of Akron Corporation. Jan. 1 Retired a piece of machinery that was purchased on January 1, 2007. The machine cost $62,000 and had a useful life of 10 years with no salvage value
June 30 Sold a computer that was purchased on January 1, 2015. The computer cost $36,000 and had a useful life of 3 years with no salvage value. The computer was sold for $5,000 cash
Dec. 31 Sold a delivery truck for $9,000 cash. The truck cost $25,000 when it was purchased on January 1, 2014, and was depreciated based on a 5-year useful life with a $4,000 salvage value.

Required:
Journalize all entries required on the above dates, including entries to update depreciation on assets disposed of, where applicable. Akron Corporation uses straight-line depreciation.

Akron Corporation

Journal Entries:

Jan. 1 Debit Assets Disposal $62,000

Credit Equipment $62,000

To transfer the cost of equipment to the Assets Disposal account.

Debit Accumulated Depreciation $62,000

Credit Assets Disposal $62,000

To transfer the accumulated depreciation to the Assets Disposal account.

June 30 Debit Assets Disposal $36,000

Credit Computer $36,000

To transfer the cost of the computer to the Assets Disposal account.

Debit Accumulated Depreciation $30,000

Credit  Assets Disposal $30,000

To transfer the accumulated depreciation to the Assets Disposal account.

Debit Cash $5,000

Credit Assets Disposal $5,000

To record the proceeds from the disposal.

Dec. 31 Debit Accumulated Depreciation $12,600

Credit Assets Disposal $12,600

To transfer the accumulated depreciation to the Assets Disposal account.

Debit Assets Disposal $25,000

Credit Delivery Truck $25,000

To transfer the cost of the delivery truck to the Assets Disposal account.

Debit Cash $9,000

Credit Assets Disposal $9,000

To record the proceeds from the disposal.

Dec. 31 Debit Loss on Disposal of Assets $4,400

Credit Assets Disposal $4,400

To record the loss from the disposal of assets.

Explanation:

a) Data and Analysis:

Jan. 1 Accumulated Depreciation $62,000 Assets Disposal $62,000 Assets Disposal $62,000 Equipment $62,000

June 30  Assets Disposal $36,000 Computer $36,000 Accumulated Depreciation $30,000 Assets Disposal $30,000 Cash $5,000 Assets Disposal $5,000

Dec. 31 Accumulated Depreciation $12,600 Assets Disposal $12,600 Assets Disposal $25,000 Delivery Truck $25,000 Cash $9,000 Assets Disposal $9,000

Dec. 31 Loss on Disposal of Assets $4,400 Assets Disposal $4,400

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