A company sells a piece of equipment half-way through the accounting period. The straight-line rate of depreciation on the equipment is $40,000 per year. Before preparing the entry to record the sale of the equipment, the company should first debit:
A. Accumulated Depreciation for $40,000 and credit Cash for $40,000.
B. Depreciation Expense for $40,000 and credit Accumulated Depreciation for $40,000.
C. Cash for $20,000 and credit Depreciation Expense for $20,000.
D. Depreciation Expense for $20,000 and credit Accumulated Depreciation for $20,000.
Answer: D
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