Brown's Salvage Company purchased a computer for $3,100 debiting Computer Equipment. Diring 2016 and 2017, Borwn's Salvage Company recored total depreciation of $2,200 on the computer. On January 1, 2018, Borwn's Salvage Conpany traded in the computer for a new one, paying $2,900 cash. The fair market value of the new conputer is $4,000. Journalize Brown's Salvage Company's exchange of conputers. Assume the exchange had commercial substance.

Let's begin by calculating the gain or loss on the exchange of computer equipment on January 1. Market value of assets received Less: Book value of asset exchanged Cash paid Gain or (Loss) Journalize Brown's Salvage Company's exchange of computers. (Record a single compound journal entry. Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Accounts and Explanation Debit Credit Jan. 1 Date