0000 Pre 000 prepare the journal entry to record the sale pa

0,000. Pre 000; prepare the journal entry to record the sale. pare the journal entry to record the On July 15, 2018, Cottonwood Industries sold a patent and equipment to Rouq e date of sale Wer and $325,000, respectively. The book value of the patent and equipment on t uemore Corporation for $750.000 the date of sale were $120 uipment to Roque to record the sales of the patent and equipment. ess accumulated depreciation of $150,000), respectively. Prepare tc jourl e journal entries Mondale u

Solution

Sale value of patent = $750,000

Book value of patent on date of sale = $120,000

Profit on Sale of patent = Sales Price – Book value

= $750,000 - $120,000

= $630,000

Journal Entry for Sale

Bank                          $750,000

       Patent                                 $120,000

       Profit on sale of patent   $630,000

(Being Patent sold at profit)

Sale value of equipment = $325,000

Book value of equipment on date of sale = $400,000

Loss on Sale of equipment = Book value - Sales Price

= $400,000 - $325,000

= $75,000

Journal Entry for Sale

Bank                                                 $325,000

Accumulated Depreciation          $150,000

Loss on Sale of Equipment           $ 75,000

       Equipment                                        $550,000

(Being equipment sold at loss)