On January 1, Year 17, Devi Corp. sold to Charlottetown Ltd. equipment it had purchased for $300,000
Question:
On January 1, Year 17, Devi Corp. sold to Charlottetown Ltd. equipment it had purchased for $300,000 and used for eight years. Devi recorded a gain of $28,000 on the sale. The equipment has a total useful life of 15 years and is depreciated on a straight-line basis. Devi holds 70 percent of Charlottetown’s voting shares. Neither company owns any other equipment.
Required
(a) Give the journal entry made by Devi on January 1, Year 17, to record the sale of equipment.
(b) Give the journal entries recorded by Charlottetown during Year 17 to record the purchase of equipment and yearend depreciation expense.
(c) What amounts should be reported on the Year 17 consolidated statements for equipment, accumulated depreciation, depreciation expense and gain on sale of equipment?
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A journal entry is an act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company\'s debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit
