Please answer parts A and B Bridgeport Company purchased an electric press on June 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 press Cash paid Cost of old press (10-year life, $1,000 residual value) Accumulated depreciation-old press (straight-line) Second-hand market value of old press Show Transcribed Text No. Account Titles and Explanation (a) Exchange has commercial substance: Depreciation Expense Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. Bridgeport's fiscal year ends on December 31, and depreciation has been recorded through December 31, 2024. (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.) Accumulated Depreciation-Equipment (To record current depreciation.) Equipment Accumulated Depreciation-Equipment Gain on Disposal of Equipment Cash Equipment (To record exchange of the equipment.) Show Transcribed Text (b) Exchange lacks commercial substance: 3 (To record current depreciation.) (To record exchange of the equipment.) $25,000 12,000 35,600 27,400 7,100 C C Debit 19100 Credit 12000 35600
Please answer parts A and B Bridgeport Company purchased an electric press on June 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 press Cash paid Cost of old press (10-year life, $1,000 residual value) Accumulated depreciation-old press (straight-line) Second-hand market value of old press Show Transcribed Text No. Account Titles and Explanation (a) Exchange has commercial substance: Depreciation Expense Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. Bridgeport's fiscal year ends on December 31, and depreciation has been recorded through December 31, 2024. (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.) Accumulated Depreciation-Equipment (To record current depreciation.) Equipment Accumulated Depreciation-Equipment Gain on Disposal of Equipment Cash Equipment (To record exchange of the equipment.) Show Transcribed Text (b) Exchange lacks commercial substance: 3 (To record current depreciation.) (To record exchange of the equipment.) $25,000 12,000 35,600 27,400 7,100 C C Debit 19100 Credit 12000 35600
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Please answer parts A and B
List price of new press
Cash paid
Cost of old press (10-year life, $1,000 residual value)
Accumulated depreciation-old press (straight-line)
Second-hand market value of old press
Bridgeport Company purchased an electric press on June 30, 2025, by trading in its old gas model and paying the balance in cash. The
following data relate to the purchase:
Show Transcribed Text
No. Account Titles and Explanation
(a) Exchange has commercial substance:
Depreciation Expense
Accumulated Depreciation-Equipment
Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks
commercial substance. Bridgeport's fiscal year ends on December 31, and depreciation has been recorded through December 31,
2024. (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.)
(To record current depreciation.)
Equipment
Accumulated Depreciation-Equipment
Gain on Disposal of Equipment
Cash
Equipment
(To record exchange of the equipment.)
Show Transcribed Text
(b) Exchange lacks commercial substance:
S
(To record current depreciation.)
(To record exchange of the equipment.)
$25,000
12,000
c
35,600
27,400
7,100
c
Debit
19100
Credit
12000
35600
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