Allyn Company purchased equipment costing 55,000 on January 1, Year 1. The equipment is estimated to have a salvage value of 5,000 and an estimated useful life of 5 years.Double-declining -depreciation is used, and all depreciation has been recorded as of December 31, Year 2. If the equipment is sold on December 31, Year 2 for 15,000 the journal entry to record the sale is: Debit Cash, 15,000 Debit Loss on Sale, 40,000 Credit Equipment, 55,000 Debit Cash, 15,000 Debit Accumulated Depreciation, 40,000 Credit Equipment, 55,000 Debit Cash, 15,000 Debit Akcumulated Depreciation, 13,200 Debit Loss on Sale, 26,800 Credit Equipment, 55,000 Debit Cash, 15,000 Debit Accumulated Depreciation, 35,200 Debit Loss on Sale, 4,800 Credit Equipment, 55,000 Debit Cash, 15,000 Debit Accumulated Depreciation, 22,000 Debit Loss on Sale, 18,000 Credit Equipment, 55,000

To determine the correct journal entry for the sale of the equipment, we need to calculate the accumulated depreciation up to December 31, Year 2, using the double-declining balance method.1. **Calculate Depreciation for Year 1:** - Double-declining rate = - Depreciation for Year 1 = 22,000 \)2. **Calculate Book Value at End of Year 1:** - Book value at end of Year 1 = Cost - Accumulated Depreciation - Book value at end of Year 1 = 22,000 = \ 35,200 \)5. **Calculate Book Value at End of Year 2:** - Book value at end of Year 2 = Cost - Total Accumulated Depreciation - Book value at end of Year 2 = 35,200 = \ 15,000 - Loss on sale = Book value - Sale price - Loss on sale = 15,000 = \ - Debit Accumulated Depreciation: - Credit Equipment: ; Debit Accumulated Depreciation, ; Credit Equipment, .