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On the last day of the year, a particular piece of equipment that originally cost $87,500 many years ago was removed from the production line and put on the shipping dock. The equipment is of no further use to the business and will be hauled away to the junk heap in a few days. The asset is fully depreciated. What entry should be made for the retirement of the fixed asset?
A business invests in a franchise, which gives it the right to operate under a well known trade name and logo. The franchise contract is for ten years, and the business pays $250,000 to the franchisor. What adjusting entry should be made at the end of the first year concerning the cost of the franchise?
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