Carla corporation owns machinery that cost $24,800 when purchased on july 1, 2017. depreciation has been recorded at a rate of $2,976 per year, resulting in a balance in accumulated depreciation of $10,416 at december 31, 2020. the machinery is sold on september 1, 2021, for $13,020.

prepare journal entries to (a) update depreciation for 2021 and (b) record the sale. (credit account titles are automatically indented when amount is entered. do not indent manually. if no entry is required, select "no entry" for the accoun

a. Journal entries to update depreciation for 2021:

Debit Depreciation expense $1,984

Credit Accumulated depreciation account $1,984

b. Journal entries to record the sale:

Debit Cash $13,020

Debit Accumulated depreciation account $12,400

Credit Gain on asset disposal  $620

Credit Machinery asset $24,800

Explanation:

a. Depreciation of the machinery has been recorded at a rate of $2,976 per year.

Depreciation per month = $2,976/12 = $248. In 2021, the machinery is used from Jan 1 to August 31 (8 months).

Depreciation expense for 2021 = $248 x 8 = $1,984

Journal entries to update depreciation for 2021:

Debit Depreciation expense $1,984

Credit Accumulated depreciation account $1,984

b.

Accumulated depreciation account at December 31, 2020 has credit balance of $12,400 ($10,416 + $1,984 = $12,400)

The carrying amount of the machinery = Cost of the machinery -  Accumulated depreciation = $24,800 - $12,400 = $12,400

Sales price - Carrying amount of the machinery = $13,020 - $12,400 = $620>0

The company recognizes gain on the sale. Journal entries to record the sale:

Debit Cash $13,020

Debit Accumulated depreciation account $12,400

Credit Gain on asset disposal  $620

Credit Machinery asset $24,800

answer; /// (b) i believe its that is paid to state and federal taxing authorities;

answer; normative economics;