Question
On 11/30/15 Cougar Corp. exchanged an old truck for a piece of equipment and cash.The truck was purchased on 11/1/10 for $20,000 and was depreciated
On 11/30/15 Cougar Corp. exchanged an old truck for a piece of equipment and cash.The truck was purchased on 11/1/10 for $20,000 and was depreciated using the straight-line depreciation method based on the following assumptions:
a) residual value of $5,600,
b) the useful life of 6 years.
As compensation for the truck, Cougar Corp received a piece of equipment with a fair value of $7,500 and $1,000 cash.
1. Record the journal entry for the exchange assuming the transaction DOES have commercial substance.
2. Record the journal entry for the exchange assuming the transaction DOES NOT have commercial substance. Round all amounts to the nearest dollar.
Step by Step Solution
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There are 3 Steps involved in it
Step: 1
1 Assuming the transaction DOES have commercial substance the journal entry to record the exchange w...
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
15th edition
77861612, 1259194078, 978-0077861612, 978-1259194078
