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Metro Company trades its used machine for a new model at Denver Solutions Inc. The used machine has a book value of $8,000 (original cost
Metro Company trades its used machine for a new model at Denver Solutions Inc. The used machine has a book value of $8,000 (original cost of $12,000, accumulated depreciation of $4,000) and a fair value of $6,000. The new model lists for $16,000. Denver gives Metro a trade-in allowance of $9,000 for the used machine. Prepare a journal entry for Metro, assuming no commercial substance
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