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Prepare the journal entry to record the sale of the truck

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Question - On July 1, 2016, Farm Fresh Industries purchased a specialized delivery truck for $175,600. At the time, Farm Fresh estimated the truck to have a useful life of eight years and a residual value of $22,000. On March 1, 2021, the truck was sold for $72,000. Farm Fresh uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service.

Required -

1. Prepare the journal entry to update depreciation in 2021.

2. Prepare the journal entry to record the sale of the truck.

3. Assuming that the truck was instead sold for $97,000, prepare the journal entry to record the sale.

Reference no: EM133122768

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