Spa Sources Corporation Purchased a Machine That Had an Original

Question 124

Spa Sources Corporation purchased a machine that had an original cost of $60,000 and an estimated residual value of $10,000.The useful life was expected to be 8 years and straight-line depreciation is used.At the end of 2019,the book value of the machine was $35,000.Spa Sources sold the machine for $32,000 cash on October 1,2020. A.Prepare the journal entry to record depreciation for 2020 up to the date of sale. B.Prepare the journal entry to record the sale of the machine.