USA Equipment Rental Company Selling Equipment After Useful Life

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Hello,

I have an equipment rental company that customarily sells its rental equipment when they're done with it. I am looking for some guidance on the proper accounting of these transactions. My first thought is that it would be booked as typical disposition of equipment with the gain or loss included in other income but it looks like the company is recording this in the revenue account. Why is this? Some additional details are below:

upload_2016-11-17_10-11-7.png

FYI the similar note for PP&E says the gain or loss is included in other income.

upload_2016-11-17_10-13-20.png

Attn: Rental Equipment Sales

upload_2016-11-17_10-13-59.png

Only gain on sale of PP&E included here.

upload_2016-11-17_10-14-39.png


however both gains are broken out in the cash flow statement, which I understand, to include the full proceeds below.

upload_2016-11-17_10-15-42.png

My question is why is this booked differently from sale of PP&E? What would a journal entry look like for the sale of rental equipment and why?

Any insight would be appreciated.

Thanks,
Phil
 

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