Abbott landscaping purchased a tractor at a cost of $40,000 and sold it three years later for $20,300. abbott recorded depreciation using the straight-line method, a five-year service life, and a $2,500 residual value. tractors are included in the equipment account. assume the tractor was sold for $12,700 instead of $20,300. record the sale. (if no entry is required for a particular transaction/event, select "no journal entry required" in the first account field.)

The Journal entries are as follows:

(i) Sale of Equipment

Cash A/c                                       Dr. $20,300

Accumulated Depreciation A/c   Dr. $22,500

To Equipment                                                      $40,000

To Gain                                                                 $2,800

(To record the sale of equipment)

(ii) Sale of Equipment

Cash A/c                                       Dr. $12,700

Accumulated Depreciation A/c   Dr. $22,500

Loss A/c                                         Dr. $4,800

To Equipment                                                      $40,000

(To record the sale of equipment)

Workings:

Accumulated Depreciation = [(40,000 - 2,500) ÷ 5] × 3 years

                                             = 7,500 × 3 years

                                             = $22,500

answer; automated fingerprint;