Sunland Corporation owns machinery that cost $25,200 when purchased on July 1, 2022. Depreciation has been recorded at a rate of $3,024 per year, resulting in a balance in accumulated depreciation of $10,584 at December 31, 2025. The machinery is sold on September 1, 2026, for $13,230. Prepare journal entries to (a) update depreciation for 2026 and (b) record the sale.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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**Sunland Corporation’s Machinery Depreciation and Sale:**

Sunland Corporation owns machinery that cost $25,200 when purchased on July 1, 2022. Depreciation has been recorded at a rate of $3,024 per year, resulting in a balance in accumulated depreciation of $10,584 at December 31, 2025. The machinery is sold on September 1, 2026, for $13,230.

**Tasks:**

1. **Update Depreciation for 2026:**
   - Prepare the necessary journal entries to account for the depreciation expense up until the sale date in 2026.

2. **Record the Sale:**
   - Document the journal entries required to record the sale of the machinery.
Transcribed Image Text:**Sunland Corporation’s Machinery Depreciation and Sale:** Sunland Corporation owns machinery that cost $25,200 when purchased on July 1, 2022. Depreciation has been recorded at a rate of $3,024 per year, resulting in a balance in accumulated depreciation of $10,584 at December 31, 2025. The machinery is sold on September 1, 2026, for $13,230. **Tasks:** 1. **Update Depreciation for 2026:** - Prepare the necessary journal entries to account for the depreciation expense up until the sale date in 2026. 2. **Record the Sale:** - Document the journal entries required to record the sale of the machinery.
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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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