Chapter 3
Long-Term Assets
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b) Assume that MNO Company’s depreciation policy recognizes only half a year’s
depreciation in the year of purchase and half a year’s depreciation in the year of disposal.
The company uses the straight-line method. The asset was sold for $15,000 on May 15,
2018. Prepare a depreciation schedule using the following table.
Year
Cost of Long-Term
Asset
Depreciation
Expense
Accumulated
Depreciation To
Date
Net Book
Value
c) Prepare the journal entry to record the depreciation on the disposal and sale.
Date
Account Title and Explanation
Debit
Credit
