Equipment Was Acquired on January 1, 2018, for $15,000 with an Estimated

Multiple Choice

Equipment was acquired on January 1, 2018, for $15,000 with an estimated 4-year life and $1,000 residual value. The company uses straight-line depreciation. Record the gain or loss if the equipment was sold on December 31, 2020, for $5,000.

A) $\begin{array}{|l|r|r|}\hline \text { Cash } & 5,000 & \\\hline \text { Accumulated Depreciation } & 10,500 & \\\hline \text { Equipment } & & 15,000 \\\hline \text { Gain } & & 500 \\\hline\end{array}$
B) $\begin{array}{|l|r|r|}\hline \text { Cash } & 5,000 & \\\hline \text { Equipment } & & 4,500 \\\hline \text { Gain } & & 500 \\\hline\end{array}$
C) $\begin{array}{|l|r|r|}\hline \text { Cash } & 5,000 & \\\hline \text { Equipment } & & 3,500 \\\hline \text { Gain } & & 1,500 \\\hline\end{array}$
D) $\begin{array}{|l|r|l|}\hline \text { Cash } & 5,000 & \\\hline \text { Accumulated Depreciation } & 7,000 & \\\hline \text { Loss } & 3,000 & \\\hline \text { Equipment } & & 15,000 \\\hline\end{array}$