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Marks Consulting purchased equipment costing $45,000 on January 1, Year 1. The equipment is estimated...

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Accounting

Marks Consulting purchased equipment costing $45,000 on January 1, Year 1. The equipment is estimated to have a salvage value of $5,000 and an estimated useful life of 8 years. Straight-line depreciation is used. If the equipment is sold on July 1, Year 5 for $20,000, the journal entry to record the sale will include a:

A) Credit to loss on sale for $10,000. B) Debit to loss on sale for $10,000. C) Credit to cash for $20,000. D) Debit to accumulated depreciation for $22,500.

E) Debit to gain on sale for $2,500.

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