A company recently traded in an older model of equipment for a new model. The old model's book value was $216,000 (original costof $476,000 less $260,000 in accumulated depreciation) and its fair value was $240,000. The company paid $64,000 to complete theexchange which has commercial substance.Required:Prepare the journal entry to record the exchange.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.View transaction listJournal entry worksheet<1Record the exchange of assets.Note: Enter debits before credits.Transaction1General Journal -Debit< PrevCredit39 of 50⠀⠀Next >

A journal entry is a basic accounting record that is used to chronologically track financial…

A company recently traded in an older model of equipment for a new model. The old model's book value was $216,0 of $476,000 less $260,000 in accumulated depreciation) and its fair value was $240,000. The company paid $64,000 exchange which has commercial substance.

A company recently traded in an older model of equipment for a new model. The old model's book value was $216,0 of $476,000 less $260,000 in accumulated depreciation) and its fair value was $240,000. The company paid $64,000 exchange which has commercial substance.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 12PB: Farm Fresh Agriculture Company purchased Sunny Side Egg Distribution for $400,000 cash when Sunny...

See similar textbooks

Related questions

Q: Hot Company exchanges an automobile machine with a carrying amount of $135,000 ( original cost ,…

A: As per IAS 16 PPE When PPE are acquired for exchange of another ppe, the same should be valued at…

Q: Willis Company trades in a printing press for a newer model. The cost of the old printing press was…

A: This is a case of asset exchange, and exchanges having commercial substance are recorded at fair…

Q: Gilly Construction trades in an old tractor for a new tractor, receiving a $29,000 trade-in…

Q: COPS Company exchanges an automobile machine with a carrying amount of $135,000 ( original cost ,…

A: Assets means the resources which is owned by business. Liability means the amount which is to be…

Q: Mariot trades in its old equipment (with the following carrying values) for new equipment. Mariot…

A: a transaction in which one party or one person gives another person ownership, right or control of…

Q: Davis Company exchanged an old machine with a cost of $120,000, total accumulated depreciation of…

A: The exchange refers to the situation where old assets are exchanged with new assets. The new…

Q: Cedric Company recently traded in an older model of equipment for a new model. The old model’s book…

A: Gain/ Loss on exchange = Fair value of of old model - Net book value of new asset Cost of…

Q: On September 30, 2020 AssetsToGo Company (ATG) agreed to an exchange of assets with another company.…

A: ''Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the…

A: This question is related to non-monetary exchange Accounting for non-monetary interactions,…

Q: China Inn and Midwest Chicken exchanged assets. China Inn received a delivery truck and gave…

A: Disposal of assets: Disposal is an activity of selling the worn-out assets that is no longer in need…

Q: On September 30, 2020 AssetsToGo Company (ATG) agreed to an exchange of assets with another company.…

A: If the asset is acquired in exchange of another assets, then the cost value of acquired asset…

Q: Pensacola Inc. purchased equipment on January 1, 2016 for $135,000.After 3 years Pensacola exchanged…

A: Cost basis means the value of an asset for tax purposes, generally, the purchase price of the asset.…

Q: Blue Spruce Inc. trades its used machine (cost $11,900 less $4,100 accumulated depreciation) for a…

A: Derecognized Old Assets :When assets are exchanged, the assets given up are derecognized at book…

Q: Bryn Enterprises exchanged old trucks (cost $70,000 less $27,000 accumulated depreciation) plus cash…

A: JOURNAL ENTRIESJournal Entry is the First stage of Accounting Process. Journal Entry is the Process…

Q: Lawson Company purchased equipment, on 1/10/2012. The cost was $90,000, with 10 years useful life,…

A: Depreciation under SLM method = (cost - salvage value)/useful life As per IFRS purchase/ sale…

Q: Caleb Company owns a machine that had cost $46,000 with accumulated depreciation of $20,200. Caleb…

A: The objective of the question is to record the exchange of a machine owned by Caleb Company for a…

Q: Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the…

A: Solution:- Given, Calaveras Tire exchanged equipment for two pickup trucks. Book Value of equipment…

Q: nge an old equipment for a new equipment.The cost and accumulated depreciation of the old equipment…

A: The adjusted net asset method is a business valuation strategy that modifies a company's reported…

Q: Cedric Company recently traded in an older model computer for a new model. The old model’s book…

A: Journal:Journal is the method of recording monetary business transactions in chronological order. It…

Q: Alamos Co. exchanged equipment and $17,000 cash for similar equipment. The book value and the fair…

A: When ever an Equipment has a commercial substance then the Equipment is to be recorded at Fair value…

Q: BTS Company has some old equipment that cost P700,000 with an accumulated depreciation of P400,000.…

A: List price (i.e., P 800,000) is the price listed on the machine. The initial cost of machine will be…

Q: any exchanged old equipment and $18,200 cash for similar equipment. The book value and the fair…

A: To provide a more accurate depiction of the exchange's economic effects, the commercial substance of…

Q: Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the…

A: Calculate the amount at which Calaveras value the pickup trucks.

Q: Cliff Company traded in an old truck for a new one. The old truck had a cost of $300,000 and…

A: Recorded value of new Truck = Fair value of the new Truck received where, Fair value of the new…

Q: Information Processing, Inc. (IPI) exchanges its used machine for a new machine with Jerrod Business…

A: The acquisition of assets is a part of business activities. When the company disposes of the asset…

Q: Hunter Sailing Company exchanged an old sailboat for a new one. The old sailboat had a cost of…

A: Solution: Book value of old sailboat = Cost - Accumulated depreciation = $210,000 - $105,000 =…

Q: Arca Salvage purchased equipment for $10,000. Arca recorded total depreciation of $8,000 on the…

A: Gain or (Loss) = Market value of assets received - (Book value of asset exchanged + Cash paid)

Q: dric Company recently traded in an older model of equipment for a new model. The old model’s book…

A: Assets -According to accounting principles, assets are a means of conducting business, whether it be…

Q: China Inn and Midwest Chicken exchanged assets. China Inn received a delivery truck and gave…

A: China Inn and Midwest Chicken exchanged assets. China Inn received a delivery truck and gave…

Q: Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the…

A: The objective of the question is to determine the value at which Calaveras will record the pickup…

Question

A company recently traded in an older model of equipment for a new model. The old model's book value was $216,000 (original cost
of $476,000 less $260,000 in accumulated depreciation) and its fair value was $240,000. The company paid $64,000 to complete the
exchange which has commercial substance.
Required:
Prepare the journal entry to record the exchange.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
View transaction list
Journal entry worksheet
<
1
Record the exchange of assets.
Note: Enter debits before credits.
Transaction
1
General Journal -
Debit
< Prev
Credit
39 of 50
⠀⠀
Next >

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction

VIEW

Step 2: Working notes for the calculation of the journal entry amount

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Abhaliya
s
Kingbird Company traded a used welding machine (cost $12,780, accumulated depreciation $4, 260) for office equipment with an estimated fair value of $7,100. Kingbird also paid $4, 260 cash in the transaction. Prepare the journal entry to record the exchange. (The exchange has commercial substance.)
Monty Corp. exchanges old delivery equipment for new delivery equipment. The book value of the old delivery equipment is $37,200 (cost $67,200 less accumulated depreciation $30,000). Its fair value is $23,100, and cash of $6,000 is paid. Prepare the entry to record the exchange, assuming the transaction has commercial substance. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry isrequired,select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit
Alpesh
Subject : Accounting
Windsor Company traded a used welding machine (cost $10,440, accumulated depreciation $3,480) for office equipment with an estimated fair value of $5,800. Windsor also paid $3,480 cash in the transaction. Prepare the journal entry to record the exchange. (The exchange has commercial substance.) (Credit account titles are automatically indented when 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.)
Maxim Company exchanged a used machine with a book value of $26,000 (cost $54,000 less $28,000 accumulated depreciation) and cash of $8,000 for a delivery truck. The machine has a estimated fair market of $36,000. The transaction has commercial substance. Regarding the journal entry to record the exchange, what value will be assigned to the delivery truck? O 36,000 O 44,000 O 54,000 O 34,000 Question 17 The cost of training employees to operate newly acquired machinery are usually capitalized as part of the acquisition value of the asset. O True
Sheffield Company traded a used truck for a new truck. The used truck cost $44,700 and has accumulated depreciation of $40,230. The new truck is worth $55,130. Sheffield also made a cash payment of $53,640. Prepare Sheffield's entry to record the exchange. (The exchange lacks commercial substance.) (Credit account titles are automatically indented when 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.) Account Titles and Explanation Debit Credit
Navajo Corporation traded a used truck (cost $20,000, accumulated depreciation $18,000) for a small computer with a fair value of $3,300. Navajo also paid $500 in the transaction. Prepare the journal entry to record the exchange. (The exchange has commercial substance.)
Sage Hill Inc. traded a used vehicle (cost $25,000, accumulated depreciation $22,000) for another used vehicle with a fair value of $3,550. Sage Hill also paid $330 cash in the transaction. Prepare the journal entry to record the exchange, assuming the transaction lacks commercial substance. (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 0 for the amounts. List all debit entries before credit entries.) Account Titles and Explanation eTextbook and Media Debit Credit
Blue Spruce Inc. trades its used machine (cost $11,900 less $4,100 accumulated depreciation) for a new machine. In addition to exchanging the old machine (which had a fair value of $11,000), Blue Spruce also paid cash of $3,200. Prepare journal entry to record exchange of assets by Blue Spruce Inc.