Northlake Nordic Centre Inc.’s groomer (cost 96,000, residual 6,000, 6 years, straight-line — 15,000 a year) is sold on 30 June of year 4. Accumulated amortization at the last 31 December was 32,500. Record the amortization to the date of sale (months ÷ 12).
Northlake Nordic Centre Inc.’s groomer (cost 96,000, residual 6,000, 6 years, straight-line — 15,000 a year) is sold on 30 June of year 4. Accumulated amortization at the last 31 December was 32,500. Record the amortization to the date of sale (months ÷ 12).
Answer
Dr Amortization Expense 7500; Cr Accumulated Amortization – Equipment 7500
Accounts - Amortization Expense - Accumulated Amortization – Equipment - Equipment - Cash - Gain on Disposal January–June is six months: 15,000 × 6/12 = **7,500**, **Amortization Expense** (debit) and **Accumulated Amortization – Equipment** (credit), bringing the contra to 40,000. The traps are a full 15,000 and skipping the step altogether — the disposal entry cannot be right until this one is in.
Hermanson Vol 1 ch 11 (disposal by sale — shape adapted); Lyryx Intermediate FA Vol 1 §10.4; Dauderis & Annand §8.6; OpenStax Financial Accounting 11.5 (cross-check) (concept map K12, K19)