Ottawa Corporation owns machinery that cost $20,000 when purchased on July 1, 2021.
Depreciation has been recorded at a rate of $2,400 per year, resulting in a balance in accumulated depreciation of $8,400 at December 31, 2025. The machinery is sold on September 1, 2026, for $10,500. Prepare journal entries to (a) update depreciation for 2026 and (b) record the sale.
Machinem $20,000
Depreuation Rate $ 2, 400 per year
Accumulated depreuation $ 8, 400
sale Price $ 10,500
Deprecation expense $ 1,600
Accumulated de priuation
maninm
$1,600
$2,400X/8/12) = $1,600
Cash
410,500
Accumulated depreciation $10,000
machinm
gain on machnry
gain on sale of
こ
sau vulve
$26,000
$500
Camrying valve
macniny $10,500-(20,000-10,000)
=
$500
BE9.17 Use the information presented for Ottawa Corporation in BE9.16, but assume the machinery is sold on March 31, for $5,200 instead of $10,500. Prepare journal entries to (a) update depreciation for 2026 and (b) record the sale.