Some accountants are of the view that on sale or disposal of a part of the asset, it is appropriate to introduce a new account called Asset Disposal (Scrapped) Account. If the entries for depreciation have been made in the main asset account itself, the book value of the sold or discarded asset should be transferred to Asset Disposal Account as under:
    Asset Disposal (or Scrapped) Account        Dr.
        To (Main) Asset Account

For Sale of Asset
    Cash/Bank Account                    Dr.
        To Asset Disposal Account

For Profit on Sale
    Asset Disposal Account                Dr.
        To Profit and Loss Account

For Loss
    Profit and Loss Account                Dr.
        To Asset Disposal Account

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