On 30 June 2018, Amalfi, Inc. purchased equipment with an estimated 5-year life for $42,600. The residual value was estimated at $9,900. Amalfi uses straight-line depreciation and calculate depreciation expense on monthly basis.
On 1 July 2020 Amalfi closed one of its plants and sold this equipment for $9,500.

Required:

(a) Write the journal entry for depreciation expense of 2020

(b) Write the journal for disposal of equipment on 1 July 2020

Depreciation expense: Depreciation rate = 1÷5 years = 20% per year

2018 July to Dec
2019
2020 Jan to June
	Accumulated depreciation	$13,080

(a.) 30 June 2020, Depreciation expense for 2020

Depreciation expense
Accumulated depreciation-Equipment

(b.) 1 July 2020, Disposal of equipment

Cash	9,500
Accumulated depreciation- Equipment
Loss on disposal of equipment
Equipment		42,600