Question
The property, plant, and equipment accounts for Ayayai Company held the following opening balances on January 1, 2023 (the first day of Ayayai's fscal year):
The property, plant, and equipment accounts for Ayayai Company held the following opening balances on January 1, 2023 (the first day of Ayayai's fscal year):
Land $488,000
Equipment 809,000
Accumulated Depreciation-Equipment 143,000
Machinery 442,000
Accumulated Depreciation-Machinery 167,000
The following transactions took place during 2023 (assume all transactions took place on January 1):
- Ayayai Company paid $ 19,400 related to the machinery and $7,900 related to the equipment for maintenance to keep the assets in normal working order.
- Equipment with an original cost of $37,800 and accumulated depreciation of $29,400 was traded in on some new equipment. The new equipment had a fair value of $48,400, and Ayayai was given a trade in allowance of $4,400 for the old equipment.
- Ayayai Company made an agreement with GRN Ltd. to exchange two similar plots of land. Ayayai's land had an original cost of $488,000 and a fair value of $717,000. GRN's land had an original cost of $515,500 and a fair value of $753,600. Ayayai also paid $36,600 in cash to GRN as part of the transaction. The exchange lacks commercial substance.
- Ayayai paid $68,000 on a major upgrade to some of the equipment that significantly increased the economic life of the equipment.
Prepare the journal entries to record the above transactions on the books of Ayayai Company. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.)
No. Account Titles and Explanation Debit Credit a. b. c. dStep by Step Solution
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