Question: Perfect Auto Rentals sold one of its cars on January 1, 2019. Perfect had acquired the car on January 1, 2017, for $23,400. At acquisition

Perfect Auto Rentals sold one of its cars on January 1, 2019. Perfect had acquired the car on January 1, 2017, for $23,400. At acquisition Perfect assumed that the car would have an estimated life of 3 years and a residual value of $3,000. Assume that Perfect has recorded straight-line depreciation expense for 2017 and 2018.
Required:
1. Prepare the journal entry to record the sale of the car assuming the car sold for
(a) $9,800 cash,
(b) $7,500 cash, and
(c) $11,500 cash.
2. How should the gain or loss on the disposition (if any) be reported on the income statement?

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Yearly depreciation expense 23400 30003 years 6800 Accumulated depreciation 2 years 6800year 13600 B... View full answer

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