Infinity Corporation purchased equipment with a 10-year useful life and zero res
ID: 2465201 • Letter: I
Question
Infinity Corporation purchased equipment with a 10-year useful life and zero residual value for $10,000. At the end of the fifth year, the equipment was destroyed in a fire. If the equipment is not insured, the entry to record the retirement of this asset will include _______. Assume the straight-line depreciation method is used.
Select all that apply and click Submit
a debit to Accumulated Depreciation for $5,000
a debit to Loss for $5,000
a credit to Equipment for $5,000
a credit to Equipment for $10,000
a debit to Depreciation Expense for $5,000
Explanation / Answer
Accumulated depreciation at end of 5th year = 10000/10*5=5000
Journal entry
Debit loss 5000
Debit accumulated dep 5000
Credit Equipment 10000