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On July 1, Simpson Corporation exchanged an old truck and $25,500 cash for a new truck. The old truck had a book value of $6,000
On July 1, Simpson Corporation exchanged an old truck and $25,500 cash for a new truck. The old truck had a book value of $6,000 (original cost of $25,000 less $19,000 in accumulated depreciation) and a fair value of $7,700. | |||
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1.Prepare the journal entry to record the exchange. Assume the exchange has commercial substance. | |||
2.Prepare the journal entry to record the exchange assuming the exchange lacks commercial substance. | |||
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