Alik Amal is a bar in Panama City, Florida. In April 2008, rowdy spring break

guests damaged a jukebox that had been purchased in 1995 for $800. The
jukebox had a useful life o1 ten years, with an estimated salvage value of $75.
Alik AmaI decided to scrap the jukebox after the incident.
Prepare the journal entry recording the scrapping of the jukebox

To prepare the journal entry for scrapping the jukebox, you would need to consider several accounts: the accumulated depreciation account, the jukebox asset account, and potentially the loss account. Here's how you can record the journal entry:

1. Start by debiting the accumulated depreciation account. This account is used to record the depreciation expense over the useful life of the asset. In this case, since the jukebox was purchased in 1995 and has a useful life of ten years, you will need to calculate the accumulated depreciation up until April 2008. Let's assume straight-line depreciation for simplification.

Let's calculate the accumulated depreciation:
Depreciation per year = (Cost - Salvage value) / Useful life
Depreciation per year = ($800 - $75) / 10 = $72.50

Accumulated depreciation as of April 2008 = Depreciation per year * Number of years in service
Accumulated depreciation = $72.50 * 13 (2008 - 1995) = $942.50

Journal entry:
Debit: Accumulated Depreciation ($942.50)

2. Debit the loss account (if necessary). If there is a loss on the scrapping of the jukebox, you will need to record it in a separate loss account. Let's assume that there is no loss in this scenario and skip this step.

3. Credit the jukebox asset account. This is to remove the jukebox from the books since it is being scrapped.

Journal entry:
Credit: Jukebox asset account ($800)

Note: If there is a loss, you would also credit the loss account in this journal entry.

That's it! Your journal entry to record the scrapping of the jukebox would be completed with the above three lines.