On June 30, 2020, JKL, Inc. sold plant equipment (asset D) for $70,000. The equipment was purchased
Question:
On June 30, 2020, JKL, Inc. sold plant equipment (asset D) for $70,000. The equipment was purchased on January 1, 2017, for 97,000. JKL, Inc. used the 200% declining balance method for this asset, over an estimated useful life of 7 years, with salvage value set at $13,000. Payment received included $10,000 cash and the buyer’s note for the balance. The note requires equal annual principal payments over 5 years from the date, together with interest at 6%. Additionally, depreciation expense for 2020 of $111,000, related to other depreciable assets of $1,066,000 is appropriate and has not been recorded.
| Acquired | Life | Cost | Salvage | |
| 1/1/2017 | Machine A | 5 years | 78,000 | 10% |
| 1/1/2018 | Machine B | 7 years | 7,000 | None |
| 1/1/2011 | Building | 35 years | 727,000 | None |
All are depreciated by the straight line method. 2020 depreciation has not been recorded. On 01-01-20, the company changed its estimate for the life of Machine B to 10 years from 7 years. Provide journal entries |
