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shown below are the t-accounts relating to equipment that was purchased for cash by a company on the first day of the current year. The equipment was depreciated on a straight-line basis with an estimated useful life of 10 years and a salvage value of $90. Part of the equipment was sold on the last day of the current year for cash proceeds.

Cash Jan. 1 (a) 446 Dec. 31 Equipment Jan. 1 1,150 Dec. 31 426 Accumulated Depreciation-Equipment Dec. 31 106 40 Dec. 31 61 Dec. 31 Depreciation Expense () Dec. 31 Gain on Disposal of Plant Assets (c) Dec. 31 Prepare the journal entries to record purchase of equipment on January 1. (Credit account title for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 1 Equipment 1150 Cash 1150 What was the cash paid? Cash Dec. 31 446 Jan. 1 406 Prepare the journal entry to record depreciation recorded on December 31. (Credit account title for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31 Depreciation Expense 167 Accumulated Depreciation- Equipment 167 What was the depreciation expense? Depreciation Expense X Dec. 31 Prepare the journal entry to record sale of part of the equipment on December 31. (Credit account Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31 What was the gain on disposal? Gain on Disposal of Plant Assets Dec. 31

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