JournaldrillDiscarding equipment with no proceeds
A journal entry exercise from Journaldrill. Solve it with an account picker and debit and credit fields in your browser, and it is checked the moment you submit.
The task
Elmwood Fitness scraps a treadmill that no longer works and receives nothing for it. The treadmill cost $6,800, and accumulated depreciation, updated to the date of disposal, is $5,950. Record the disposal.
What this exercise teaches
Book value is $6,800 - $5,950 = $850. Because nothing is received, the whole book value is a loss, debited to Loss on Disposal of Equipment. Accumulated Depreciation is debited to remove the depreciation taken, and Equipment is credited to remove the cost. Crediting Equipment for only the book value would leave the accumulated depreciation on the books.
A hint if you get stuck
Remove both the cost and its accumulated depreciation; whatever book value is left with no cash coming in is a loss.
Try it now, free, no account needed
The first 15 tasks on Journaldrill are free. Open it on the practice page, solve it, and get instant feedback with a hint. A free account adds the worked solution; Pro adds timed mode and the certificate.
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