Grace Company owns equipment that cost $70,000 when purchased on January 1, 2019. It has been depreciated using the straight-line method based on an estimated salvage value of $7,000 and an estimated useful life of 5 years. 

Instructions: Prepare Grace Company’s journal entries to record the sale of the equipment in these four independent situations. Update depreciation on assets disposed of at the time of sale.

(a) Sold for $40,000 on January 1, 2019.

(b) Sold for $40,000 on April 1, 2019.

(c) Sold for $15,000 on January 1, 2019.

(d) Sold for $15,000 on September 1, 2019.

(e) Repeat (a), assuming Grace uses double-declining balance depreciation.

(f) Repeat (c), assuming Grace uses double-declining balance depreciation.

Answer rating: 100% (QA)

a c d Date e 1Jan19 Cash b 1Apr19 Cash Account titles and Explanation Loss on Sale of equipment 7000... View the full answer