Gilly Construction trades in an old tractor for a new tractor, receiving a $21,000 trade-in allowance and paying the remaining $63,000 in cash. The old tractor had cost $83,000 and had accumulated depreciation of $45,000. Answer the following questions assuming the exchange has commercial substance. 1. What is the book value of the old tractor at the time of exchange? 2. What is the loss on this asset exchange? 3. What amount should be recorded (debited) in the asset account for the new tractor? 1. Book value 2. Loss on the exchange 3. Amount debited Check m

Gilly Construction trades in an old tractor for a new tractor, receiving a $21,000 trade-in allowance and paying the remaining $63,000 in cash. The old tractor had cost $83,000 and had accumulated depreciation of $45,000. Answer the following questions assuming the exchange has commercial substance. 1. What is the book value of the old tractor at the time of exchange? 2. What is the loss on this asset exchange? 3. What amount should be recorded (debited) in the asset account for the new tractor