Answer: Please see explanation column for explanation
Explanation:
preparing a journal account for Patel Products which sells a van that cost $20,000 and accumulated depreciation of $18,000, also receiving cash of $2000 from the purchaser, we have that:
December 29, 2019
Account title----- Cash----------Debit $2,000
Account title----Accumulated Depreciation-----Debit $18,000.
Account title------Delivery Van ----Credit $20,000
The book value of the equipment at the time of the sale was $2,000 or the cost of $20,000 with updated accumulated depreciation of $18,000. Because Patel received same $2,000 cash from the purchaser of the delivery van, there is no gain on the disposal of the equipment.
