McKain, Inc., closes its books on October 31 and prepares depreciation adjustments annually. On July 27, 2010,

Question:

McKain, Inc., closes its books on October 31 and prepares depreciation adjustments annually. On July 27, 2010, McKain sold some equipment with an original cost of $ 36,250 for $ 18,500. The equipment was purchased on November 4, 2005, and was depreciated using the straight-line method and had an estimated useful life of eight years and a of $ 1,650. Prepare the entries to update the depreciation and record the sale of the equipment.
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...