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On May 1, 2020 EZRA CORP traded a company car (historical cost $32,000; Accumulated Depreciation 28,000) plus cash of $14,000 for a delivery truck. The
On May 1, 2020 EZRA CORP traded a company car (historical cost $32,000; Accumulated Depreciation 28,000) plus cash of $14,000 for a delivery truck. The car has been depreciated on a straight line basis for 7 years. The truck has a fair value of 20,000.
- Determine the amount of gain or loss in this exchange.
- Provide the journal entry if this transaction is deemed to have commercial substance.
- Provide the journal entry if this transaction is deemed to NOT have commercial substance.
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