Our Company trades in old equipment that cost $81,000, has a book value of $53,000 and a fair value of $45,000. The new equipment has a list price of $94,000. We receive a trade in allowance for the old equipment of $50,000. This transaction has commercial substance. Prepare the journal entry to record this exchange.
Our Company trades in old equipment that cost $81,000, has a book value of $53,000 and a fair value of $45,000. The new equipment has a list price of $94,000. We receive a trade in allowance for the old equipment of $50,000. This transaction has commercial substance. Prepare the journal entry to record this exchange.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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| 1. | Our Company trades in old equipment that cost $81,000, has a book value of $53,000 and a fair value of $45,000. | ||||||||
| The new equipment has a list price of $94,000. | |||||||||
| We receive a trade in allowance for the old equipment of $50,000. | |||||||||
| This transaction has commercial substance. | |||||||||
| Prepare the |
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| Answer: | |||||||||
| Debits | Credits | ||||||||
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