Pharoah Company sells equipment on March 31, 2021, for $33,740 cash. The equipment was purchased on January 5, 2018, at a cost of $82,500, and had an estimated useful life of five years and a residual value of $2,600. Pharoah Company uses straight-line depreciation for equipment. Adjusting journal entries are made annually at the company’s year end, December 31.
1. Prepare the journal entry to update depreciation to March 31, 2021.
2. Prepare the journal entry to record the sale of the equipment
3. Prepare the journal entry to record the sale of the equipment if Pharoah Company received $26,665 cash for it
