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On January 1, a business trades in an old piece of equipment, plus some cash, for a new similar piece of equipment. The exchange transaction
- On January 1, a business trades in an old piece of equipment, plus some cash, for a new similar piece of equipment. The exchange transaction HAS commercial substance. The following information applies to this transaction:
Acquisition cost of old equipment $50,000
Book value of old equipment $15,000
Additional cash payment at time of trade $25,000
Market value of new equipment see below
- Prepare the necessary journal entry to record this transaction on January 1 assuming the new equipment has a fair market value of $38,000.
- Prepare the necessary journal entry to record this transaction on January 1 assuming the new equipment has a fair market value of $42,000.
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Case Study In Auditing
Authors: Donald H Taylor
1st Edition
0471046264, 978-0471046264
