An entity sells a piece of machinery, for cash, prior to the end of its estimated useful life.
The sale price is less than the carrying amount of the asset on the date of sale. The entry
that the entity uses to record the sale is

Answer (A) is correct.Cash is debited for the amount of the sale proceeds. Machinery and the
related accumulated depreciation are eliminated by a credit and a debit,
respectively. Because the sale price was less than the carrying amount of
the asset on the date of sale, a loss on disposal should be recognized in
net income or loss.