Wednesday, September 19, 2007

Writing Off Equipment

Whenever you dispose of equipment you have to make an entry in your General Ledger. In most cases you experience a loss so that is one account that will be used. You will also use the Equipment account and the Accumulated Depreciation account. For this example, the equipment cost 10,000 and the accumulated depreciation is 8500. The entry to write of this piece of equipment is:

Loss on Disposal of Equipment 1,500 debit
Accumulated Depreciation 8,500 debit
Equipment 10,000 credit

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