On February 22, Farmer Ramos sells his used tractor to a local equipment dealer. The dealer gives him
$10,000 cash for the tractor. Farmer Ramos bought the tractor for $50,000 and it has $38,000 of
accumulated depreciation. Which journal entry is correct?
2/22
Machinery and Equipment
50,000
Accumulated Depreciation
38,000
Cash
10,000
Gain/Loss on Sale of Farm Capital Asset
2,000
2/22
Machinery and Equipment
12,000
Accumulated Depreciation
38,000
Gain/Loss on Sale of Farm Capital Assets
40,000
Cash
10,000
2/22
Cash
10,000
Accumulated Depreciation
38,000
Gain/Loss on Sale of Farm Capital Asset
2,000
Machinery and Equipment
50,000
2/22
Cash
10,000
Accumulated Depreciation
38,000
Gain/Loss on Sale of Farm Capital Asset 2,000
Machinery and Equipment
50,000