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Question
Equipment was acquired at the beginning of the year at a cost of $75,000. The equipment was depreciated using the straight-line method based on an estimated useful life of 6 years and an estimated residual value of $7,500.
a. Compute the depreciation expense for the first year.
b. Assuming the equipment was sold at the end of the second year for $59,000, determine the gain or loss on sale of the equipment.
c. Journalize the entry for the sale.
Answer
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