Question

A company completely retires a piece of equipment that originally cost $45,000 and has $45,000 in accumulated depreciation. The equipment is discarded as worthless scrap without receiving any cash proceeds. What is the financial statement impact of this transaction?

A A loss of $45,000 is reported on the Income Statement.
B A gain of $45,000 is added to Other Income.
C Net Income is unaffected ($0 gain/loss); Accumulated Depreciation is debited for $45,000 and Equipment is credited for $45,000.
D Retained Earnings is directly debited for $45,000.
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