What is the Journal Entries for Depreciation and Disposal of FA?

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Accepted Answer

Journal entries for depreciation and disposal of fixed assets involve recording depreciation expense and gain/loss on disposal.

Depreciation expense is debited to Depreciation Expense account and credited to Accumulated Depreciation account.
When a fixed asset is disposed of, the book value of the asset is removed from the books by debiting Accumulated Depreciation and crediting the Fixed Asset account.
Any gain or loss on disposal is recorded by debiting/crediting the Fixed Asset account and crediting/debiting the Gain/Loss on Disposal account.
For example, if a machine with a book value of $10,000 is sold for $12,000, the journal entry would be: Debit Cash $12,000, Debit Accumulated Depreciation $10,000, Credit Machine $10,000, Credit Gain on Disposal $2,000.

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