What entry is made for the removal of the original cost during asset disposal?

When an asset is disposed of, the original cost of that asset must be removed from the accounting records. To accurately reflect this disposal, it is essential to debit the Disposal account to recognize the removal of the asset from the books, while simultaneously crediting the Asset at cost account to reflect the decrease in assets.

By debiting the Disposal account, you effectively acknowledge the asset's removal, and this transaction records the cost of the asset that is no longer a part of the entity's resources. Crediting the Asset at cost account reduces the total balance of the assets on the balance sheet, ensuring that the financial statements accurately depict the current state of the organization's assets. This approach aligns with the accounting principles that govern asset disposal, where both the asset's presence in the accounting records and the asset's cost need to be removed to maintain accuracy in the financial records.