Question
On December 15, 2020, Tenorio Company amd Jason Company exchanged equipment. The following data are available on the exchange. The exchange is with commercial substance,
On December 15, 2020, Tenorio Company amd Jason Company exchanged equipment. The following data are available on the exchange. The exchange is with commercial substance,
Tenorio
Jason
Equipment (cost)
500,000
300,000
Accumulated Depreciation
300,000
50,000
Fair value of Equipment
180,000
220,000
Cash paid by Tenorio to Jason
40,000
40,000
1. What is the journal entry to record the transaction in the books of Tenorio?
Date
Account Names
Debit
Credit
12/15/2020
Equipment - new
Accumulated Depreciation
Loss on Exchange
Equipment - old
Cash
2. What is the journal entry to record transaction in the books of Jason?
Date
Account Names
Debit
Credit
12/15/2020
Equipment - new
Accumulated Depreciation
Loss on Exchange
Cash
Equipment - old
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Financial Accounting
Authors: W. Steve Albrecht, James D. Stice, Earl K. Stice
10th edition
324645570, 978-0324645576
