On January 1, 2010, Montana Co. purchased five machines at a price of $10,000 per machine. Because the estimated life was five years and no salvage value was expected, a group depreciation rate of 20% was used. On January 1, 2012, one of the machines was sold for $5,000. The correct entry to record the sale of the machine is

On January 1, 2010, Montana Co. purchased five machines at a price of $10,000 per machine. Because the estimated life was five years and no salvage value was expected, a group depreciation rate of 20% was used. On January 1, 2012, one of the machines was sold for $5,000. The correct entry to record the sale of the machine is

Answer

		Cash                        5,000 Loss on Sale of Machine     1,000 Accumulated Depreciation    4,000    Machines                          10,000
		Cash                        5,000    Machines                           5,000
		Cash                        5,000 Loss on Sale of Machines    5,000    Machines                          10,000
		Cash                        5,000 Accumulated Depreciation    5,000    Machines                          10,000

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