Business: Fisher hypothesis, an increase in the expected inflation rate should lead to in the nominal interest rate and in the expected real interest rate.

Fisher hypothesis, an increase in the expected inflation

Kode9595

07.12.2021

The answer is: gain on disposal of $114500

Explanation:

The gain on disposal is calculated by the following formula:

gain on disposal=replacement cost - (purchase cost - depreciation expense)

gain on disposal = $210,500 - ($180,000 - $84,000) = $210,500 - $96,500 = $114,500

The journal records should be as follows:

Dr Cash 210,500Dr Accumulated depreciation 84,000Cr Machine 180,000Cr Gain on disposal 114,500

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