Gandalf Engineering had a large Ford delivery truck it traded in for a new Mack truck. The relevant information concerning the two trucks, on May 15.2021, the date of exchange, follows: Cost of old Ford truck Accumulated depreciation of old Ford truck List price of the new Mack truck Trade in allowance given on the exchange Fair value of the old Ford truck $43,100 33,300 45,900 14,000 11,000 Prepare the journal entry to record the purchase of the Mack truck using the Ford truck as a trade in. Gandalf paid the appropriate amount of cash for the remaining balance on the exchange. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts)

Gandalf Engineering had a large Ford delivery truck it traded in for a new Mack truck. The relevant information concerning the two trucks, on May 15.2021, the date of exchange, follows: Cost of old Ford truck Accumulated depreciation of old Ford truck List price of the new Mack truck Trade in allowance given on the exchange Fair value of the old Ford truck $43,100 33,300 45,900 14,000 11,000 Prepare the journal entry to record the purchase of the Mack truck using the Ford truck as a trade in. Gandalf paid the appropriate amount of cash for the remaining balance on the exchange. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Recording Asset Exchanges Minneapolis Inc. has equipment with an original cost of $52,500 and accumulated depreciation of $30,000. This equipment was traded in for new equipment with a list price of $60,000. The new machine can be purchased without a trade-in for $56,250 cash. The difference between the fair value of the new asset and the market value of the old asset will be paid in cash. Prepare the entry to record acquisition of the new machine under each of the following separate cases. a. The new machine is purchased for cash with no trade-in. b. The transaction has commercial substance. The old equipment is traded in, and $37,500 cash is paid. c. The same as in part b except that the transaction lacks commercial substance. a. Account Name Dr. Cr. Answer Answer b. Account Name Dr. Cr. Answer Answer Answer Answer Answer Answer Answer Answer C. Account Name Dr. Cr. Answer…
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