P7-64A. (Learning Objectives 1, 2, 3: Recording PPE transactions; exchanges; and changes in useful life) Carr, Inc., has the following PPE accounts: Land, Buildings, and Equipment, with a separate accumulated depreciation account for each of these except land. Carr completed the following transactions:

Requirement 1. Record the transactions in Carr, Inc.’s journal.

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Jan 2 Jun 30 Oct 29 Dec 31 Traded in equipment with accumulated depreciation of $65,000 (cost of $136,000) for similar new equipment with a cash cost of $175,000. Received a trade-in allowance of $75,000 on the old equipment and paid $100,000 in cash. Sold a building that had a cost of $655,000 and had accumulated deprecia- tion of $130,000 through December 31 of the preceding year. Depreciation is computed on a straight-line basis. The building has a 40-year useful life and a residual value of $275,000. Carr received $115,000 cash and a $405,250 note receivable. Purchased land and a building for a single price of $390,000. An indepen- dent appraisal valued the land at $221,100 and the building at $180,900. Recorded depreciation as follows: Equipment has an expected useful life of 5 years and an estimated residual value of 6% of cost. Depreciation is computed on the double-declining-balance method. Depreciation on buildings is computed by the straight-line method. The new building carries a 40-year useful life and a residual value equal to 20% of its cost.