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If a capital asset is retired before it is fully amortized, and the residual value...

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Accounting

If a capital asset is retired before it is fully amortized, and the residual value received is less than the asset's book value, a gain on disposal occurs.

  1. a gain on disposal occurs.
  2. a loss on disposal occurs.
  3. there is no gain or loss on disposal.
  4. additional amortization expense must be recorded.

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