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Transaction analysis for sale of a machine

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When a machine having a net book value of $5,000 is sold for $4,000:

a. current assets increase, equipment (net) increases, and net income increases.

b. current assets increase, equipment (net) decreases, and net income increases.

c. current assets increase, equipment (net) decreases, and net income decreases.

d. current assets increase, equipment (net) increases, and net income decreases.

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Solution Summary

The expert examines a transaction analysis for sales of a machine.

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(1) Answer:

(C) current assets increase, equipment (net) decreases, and net income decreases.

(2) General Journal entry:

Cash Dr ...

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