Hi There

I have the following scenario of asset disposal via a sale:

Asset original cost: $250,000

Accumulated depreciation: $12,361

Net Book Value: $237,639 (this being the $250k original cost less $12,361 accumulated depreciation till date)

The asset is sold for $240,000.

This means there should be a gain on sale of $240,000-$237,639= $2,361

The normal double entry book keeping entries I would expect are:

Dr Cash $240,000 (or receivables if sold on account)

Dr Accumulated depreciation $12,361 (to remove the asset from the balance sheet)

Cr Asset $250,000 (to remove the asset from the balance sheet)

Cr Gain on Sale $2,361 (other revenue account to recognise difference between cash received and the net book value of the asset).