Entries for trade of fixed asset On July 1, Twin Pines Co., a water distiller, acquired new bottling equipment with a list price

(fair market value) of $220,000. Twin Pines received a trade-in allowance (fair market value)

of $45,000 on the old equipment of a similar type and paid cash of $175,000. The following information about the old equipment is obtained from the account in the equipment ledger:

cost, $180,000; accumulated depreciation on December 31, the end of the preceding fiscal year,

$120,000; annual depreciation, $12,000. Assuming the exchange has commercial substance, journalize the entries to record

(a) the current depreciation of the old equipment to the date of trade-in and

(b) the exchange transaction on July 1.

AppendixLO1