WAEC Financial Accounting 2001 Question 35

Jeng Limited disposed a fixed asset in 1999 for N2,000. The asset was purchased in 1996 at a cost of N10,000 and has been depreciated at the rate of 20% per annum using the straight line method.
What is the correct entry for the sale of the asset in the Asset Account and Disposal of Asset Account?

1. A.Debit Fixed Asset Account N4,000, credit Disposal of Assets Account N4,000
2. B.Debit Disposal of Asset Account N4,000, credit Fixed Asset Account N4,000
3. C.Debit Disposal of Asset Account N2,000, credit Fixed Asset Account N2,000
4. D.Debit Fixed Asset Account N2,000, credit Disposal of Assets Account N2,000.