17

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 $413,000. Twin Pines received a trade-in allowance (fair market value) of $85,300 on the old equipment of a similar type and paid cash of $327,700. The following information about the old equipment is obtained from the account in the equipment ledger: cost, $283,000; accumulated depreciation on December 31, the end of the preceding fiscal year, $184,800; annual depreciation, $16,800. Assume the exchange has commercial substance.

a. Journalize the entry to record the current depreciation of the old equipment to the date of trade-in. If an amount box does not require an entry, leave it blank.

	Depreciation Expense-Equipment	fill in the blank b71f47005005f82_2	fill in the blank b71f47005005f82_3
	Accumulated Depreciation-Equipment	fill in the blank b71f47005005f82_5	fill in the blank b71f47005005f82_6

Feedback

Remember that the amount given for the depreciation on the fixed asset is the annual amount.

b. Journalize the entry to record the exchange transaction on July 1. If an amount box does not require an entry, leave it blank.

	Accumulated Depreciation-Equipment	fill in the blank 0c1169ff5f95038_2	fill in the blank 0c1169ff5f95038_3
	Equipment	fill in the blank 0c1169ff5f95038_5	fill in the blank 0c1169ff5f95038_6
	Loss on Exchange of Equipment	fill in the blank 0c1169ff5f95038_8	fill in the blank 0c1169ff5f95038_9
	Equipment	fill in the blank 0c1169ff5f95038_11	fill in the blank 0c1169ff5f95038_12
	Cash	fill in the blank 0c1169ff5f95038_14	fill in the blank 0c1169ff5f95038_15