7A.

Metro Graphic

purchased equipment for

$12,000.

Metro

recorded total depreciation of

$9,000

on the equipment. Assume that

Metro

exchanged the old equipment for new equipment, paying

$7,500

cash. The fair market value of the new equipment is

$10,200.

Journalize

Metro's

exchange of equipment. Assume this exchange has commercial substance.

Question content area bottom

Part 1

Let's begin by calculating the gain or loss on the exchange of equipment. (Enter a loss with a minus sign or parentheses.)

Market value of assets received
Less:
Book value of asset exchanged
Cash paid
Gain or (Loss)

Part 2

Journalize

Metro's

exchange of equipment. (Record a single compound journal entry. Record debits first, then credits. Select the explanation on the last line of the journal entry table.)

Date			Accounts and Explanation	Debit	Credit