Windsor Company purchased an electric wax melter on April 30, 2025, by trading in its old gas model and paying the balance in cash.The following data relate to the purchase.List price of new melterCash paidCost of old melter (5-year life, $700 salvage value)Accumulated depreciation-old melter (straight-line)Secondhand fair value of old melterNo. Account Titles and Explanation(a) Exchange has commercial substance:(To record current depreciation.)Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lackscommercial substance. Windsor's fiscal year ends on December 31, and depreciation has been recorded through December 31, 2024.(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" forthe account titles and enter O for the amounts. List all debit entries before credit entries.)(To record exchange of the equipment.)(b) Exchange lacks commercial substance:(To record current depreciation.)$18,30011,600(To record exchange of the equipment.)13,0007,3006,000DebitCredit

Name: Windsor Company purchased an electric wax melter on April 30, 2025, b
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Description: Windsor Company purchased an electric wax melter on April 30, 2025, by trading in its old gas model and paying the balance in cash.The following data relate to the purchase.List price of new melterCash paidCost of old melter (5-year life, $700 salva

A journal entry is the process of recording the events of a business in the books of the company. A…

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Windsor Company purchased an electric wax melter on April 30, 2025, by trading in its old gas model and paying the balance in cash The following data relate to the purchase. List price of new melter Cash paid Cost of old melter (5-year life, $700 salvage value) Accumulated depreciation-old melter (straight-line) Secondhand fair value of old melter $18,300 11,600 13,000 7,300 6,000 Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lack commercial substance. Windsor's fiscal year ends on December 31, and depreciation has been recorded through December 31, 202 (Credit account titles are automatically indented when 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. List all debit entries before credit entries.)

Windsor Company purchased an electric wax melter on April 30, 2025, by trading in its old gas model and paying the balance in cash The following data relate to the purchase. List price of new melter Cash paid Cost of old melter (5-year life, $700 salvage value) Accumulated depreciation-old melter (straight-line) Secondhand fair value of old melter $18,300 11,600 13,000 7,300 6,000 Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lack commercial substance. Windsor's fiscal year ends on December 31, and depreciation has been recorded through December 31, 202 (Credit account titles are automatically indented when 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. List all debit entries before credit entries.)

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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A company recently traded in an older model of equipment for a new model. The old model's book value was $216,000 (original cost of $476,000 less $260,000 in accumulated depreciation) and its fair value was $240,000. The company paid $64,000 to complete the exchange which has commercial substance. Required: Prepare the journal entry to record the exchange. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet
On September 3, 2018, the Robers Company exchanged equipment with Phifer Corporation. The facts of theexchange are as follows:Robers’ Asset Phifer’s AssetOriginal cost $120,000 $140,000Accumulated depreciation 55,000 63,000Fair value 75,000 70,000To equalize the exchange, Phifer paid Robers $5,000 in cash.Required:Record the exchange for both Robers and Phifer. The exchange has commercial substance for both companies.
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