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1. Our company trades in old equipment that cost $121,500, has a book value of $74,500 and a fair value of $65,000. The new equipment

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1. Our company trades in old equipment that cost $121,500, has a book value of $74,500 and a fair value of $65,000. The new equipment has a list price of $141,000. We receive a trade in allowance for the old equipment of $75,000. This transaction has commercial substance. Prepare the journal entry to record this exchange. Answer: Credits New Equipment Debits 141,000 Old equipment 121,500

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