Peace Bank recently traded in office fixtures. Here are the facts:
Old fixtures:
• Cost, \($99,000\)
• Accumulated depreciation, \($73,000\) New fixtures:
• Cash paid, \($105,000\), plus the old fixtures
Requirements
1. Record Peace Bank’s trade-in of old fixtures for new ones.
2. Now let us change one fact and see a different outcome. Peace Bank feels compelled to do business with Crescent Furniture, a bank customer, even though the bank can get the fixtures elsewhere at a better price. Peace Bank is aware that the new fixtures’ market value is only \($123,000\). Now record the trade-in.