Kingbird company purchased an electric wax melter on April 30, 2025, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase. List price of new melter: 22,400 cash paid: 14,200 cost of old melter (5 year life, $900 salvage valye) 15,900 accumulated depreciation-old melter (straight-line): 8,900 secondhand fair value of old melter 7,400. prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commerical substance, and (b) lacks commerical substance, Kingbird's fiscal year ends on demcember 31, and deprecation has been recorded through decemeber 31, 2024
Kingbird company purchased an electric wax melter on April 30, 2025, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase. List price of new melter: 22,400 cash paid: 14,200 cost of old melter (5 year life, $900 salvage valye) 15,900 accumulated depreciation-old melter (straight-line): 8,900 secondhand fair value of old melter 7,400. prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commerical substance, and (b) lacks commerical substance, Kingbird's fiscal year ends on demcember 31, and deprecation has been recorded through decemeber 31, 2024
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Kingbird company purchased an electric wax melter on April 30, 2025, by trading in its old gas model and paying the
balance in cash. The following data relate to the purchase. List price of new melter: 22, 400 cash paid: 14,200 cost of old
melter (5 year life, $900 salvage valye) 15,900 accumulated depreciation - old melter (straight-line): 8,900 secondhand
fair value of old melter 7,400. prepare the journal entries necessary to record this exchange, assumimng that the
exchange (a) has commerical substance, and (b) lacks commerical substance. Kingbird's fiscal year ends on demcember
31, and deprecation has been recorded through decemeber 31, 2024
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