On january 2, 2015, dixie, inc., pays a salvage company $1,000 to haul away a machine costing $28,000 with accumulated depreciation of $28,000. complete the necessary journal entry by selecting the account names and dollar amounts from the drop-down menus.

The journal entry is as follows:

Explanation:

January 2        Accumulated Depreciation A/cDr    $28,000

                        Loss on disposal of machine A/cDr    $1,000

                                   To Cash A/cCr   $1,000

                                   To Machinery A/cCr    $28,000

The company pays salvage value so cash is going out of the business, therefore, it is credited. And the salvage value will result in loss on disposal of machine so it is debited. The accumulated depreciation is debited and the account of machine is credited.

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