To record the disposal of the equipment, we need to make the following entries:

1. Debit Accumulated Depreciation for $200,000: This account represents the total depreciation expense recorded on the equipment over its useful life. Since $200,000 of accumulated depreciation has been recorded, we need to reduce this amount to reflect the disposal.

2. Debit Loss on Disposal for $40,000: This account represents the loss incurred from the disposal of the equipment. The difference between the equipment's book value ($420,000 - $200,000 = $220,000) and the cash received ($180,000) is a loss of $40,000.

3. Credit Equipment for $420,000: This account represents the original cost of the equipment. Since the equipment is being disposed of, we need to remove it from the books by crediting the account for its original cost.

4. Credit Cash for $180,000: This account represents the cash received from the disposal of the equipment.

Therefore, the correct entry to record this event would include a debit to Accumulated Depreciation for $200,000, a debit to Loss on Disposal for $40,000, a credit to Equipment for $420,000, and a credit to Cash for $180,000.

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To record the disposal of the equipment, we need to make the following entries:

1. Debit Accumulated Depreciation for $200,000: This account represents the total depreciation expense recorded on the equipment over its useful life. Since $200,000 of accumulated depreciation has been recorded, we need to reduce this amount to reflect the disposal.

2. Debit Loss on Disposal for $40,000: This account represents the loss incurred from the disposal of the equipment. The difference between the equipment's book value ($420,000 - $200,000 = $220,000) and the cash received ($180,000) is a loss of $40,000.

3. Credit Equipment for $420,000: This account represents the original cost of the equipment. Since the equipment is being disposed of, we need to remove it from the books by crediting the account for its original cost.

4. Credit Cash for $180,000: This account represents the cash received from the disposal of the equipment.

Therefore, the correct entry to record this event would include a debit to Accumulated Depreciation for $200,000, a debit to Loss on Disposal for $40,000, a credit to Equipment for $420,000, and a credit to Cash for $180,000.

Knowee AI · Accepted Answer

To record the disposal of the equipment, we need to make the following entries:

1. Debit Accumulated Depreciation for $200,000: This account represents the total depreciation expense recorded on the equipment over its useful life. Since $200,000 of accumulated depreciation has been recorded, we need to reduce this amount to reflect the disposal.

2. Debit Loss on Disposal for $40,000: This account represents the loss incurred from the disposal of the equipment. The difference between the equipment's book value ($420,000 - $200,000 = $220,000) and the cash received ($180,000) is a loss of $40,000.

3. Credit Equipment for $420,000: This account represents the original cost of the equipment. Since the equipment is being disposed of, we need to remove it from the books by crediting the account for its original cost.

4. Credit Cash for $180,000: This account represents the cash received from the disposal of the equipment.

Therefore, the correct entry to record this event would include a debit to Accumulated Depreciation for $200,000, a debit to Loss on Disposal for $40,000, a credit to Equipment for $420,000, and a credit to Cash for $180,000.

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