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Prepare the journal entry to record the derecognition

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Question: A machine was purchased during 2019 for $3,750,000. At the time of purchase it was estimated that the machine would have a useful life of ten years and a residual value of $750,000. During 2025 the machine was sold for $1,850,000. The company uses straight-line depreciation, but does not record depreciation expense in the year of acquisition or disposal. a. Prepare the journal entry to record the derecognition of the asset in 2025. b. Assume that rather than using the straight-line method, the company uses the declining balance method of depreciation at a 20% rate. Prepare the journal entry to record the derecognition of the asset in 2025.

Reference no: EM132742378

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