Question
Oriole Company traded in a manual pressing machine for an automated pressing machine and gave $41000 cash. The old machine cost $467000 and had a
Oriole Company traded in a manual pressing machine for an automated pressing machine and gave $41000 cash. The old machine cost $467000 and had a net book value of $332000. The old machine had a fair value of $325000.
Which of the following is the correct journal entry to record the exchange assuming commercial substance?
Equipment
Accumulated Depreciation
Equipment
Cash
643000
135000
467000
41000
Equipment
Equipment
Cash
366000
325000
41000
Cash
Equipment
Loss on Disposal
Accumulated Depreciation
Equipment
41000
325000
7000
135000
508000
A SUPPORT
Equipment
366000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Financial Accounting
Authors: Carl S. Warren, Jim Reeve, Jonathan Duchac
14th edition
1305088433, 978-1305088436
