Answer:
Debit Cash account $45,000
Credit Disposal account (p/l) $45,000
Explanation:
When an asset is sold, the asset will be derecognized from the books. Where the sales proceed is more than the book value, the company recognizes a gain on disposal otherwise a loss.
Since the cost of the asset was $55,000 at sale, the general ledger affected is the fixed asset ledger which is credited by $55,000 while the debit goes to the disposal account(p/l).
For the amount received for the disposal, the general ledger involved are cash and the disposal account (p/l). The entries required are debit cash and credit disposal account both with $45,000.
