Question 3 2(working and calculations) +3 (journal entry) =5 Marks

Latif Company purchased equipment for $22,000. Latif recorded total depreciation of $19,000 on the equipment. On January 1, 2018, Latif traded in the equipment for new equipment, paying $23,200 cash. The fair market value of the new equipment is $25,100. Journalize Latif Companys exchange of equipment.