I need help with my homework. At the end of the equipments usefull life it has a residual value of 6500 dollars. The total value of the equipment is 126500. So the depreciation cost to me is the 120,000. How do i journalize the retirement of the equipment?
Mandi
Favorite Answer
If you still have residual value you will have to get rid of that. So you would debit accumulated depreciation and credit the asset. Then you have to do something with that extra value - most likely it would go into a "gain or loss on disposal of asset" type account. So you would debit that account - for a loss.
Hope it helps.