Pronghorn Group has negotiated the purchase of a new piece of automatic equipment at a price of HK$6,160 plus trade-in, fo.b.factory. Pronghorn paid HK$6,160 cash and traded in used equipment. The used equipment had originally cost HK$54,560; it had abook value of HK$36,960 and a secondhand fair value of HK$40,320, as indicated by recent transactions involving similar equipment.Freight and installation charges for the new equipment required a cash payment of HK$960.(a)Your answer is correct.ressPrepare the general journal entry to record this transaction, assuming that the exchange has commercial substance. (Creditaccount titles are automatically Indented when amount is entered. Do not indent manually. Include in your journal entry separate accountentries for both the new and old equipment. If no entry is required, select "No Entry" for the account titles and enter O for the amounts)Account Titles and ExplanationEquipmentAccumulated Depreciation EquipmentEquipmentCashiDebit47.44017,600Credit54500 (b)Your answer is partially correct.Assuming the same facts as in (a) except that fair value information for the assets exchanged is not determinable, prepare thegeneral journal entry to record this transaction. (Credit account titles are automatically indented when amount is entered. Do notindent manually. Include in your journal entry separate account entries for both the new and old equipment. If no entry is required, select"No Entry" for the account titles and enter O for the amounts)Account Titles and ExplanationEquipmentAccumulated Depreciation EquipmentEquipmenteTextbook and MediaList of AccountsfotoLast saved 3 second agDebit6438625200Credit7812011466Attempts 1 of 3 usedSubmit Answer

Journal entry records the accounting transactions of a business in a journal book. All the business…

Pronghorn Group has negotiated the purchase of a new piece of automatic equipment at a price of HK$6,160 plus trade-in, fo.b. factory. Pronghorn paid HK$6,160 cash and traded in used equipment. The used equipment had originally cost HK$54,560; it had a book value of HK$36,960 and a secondhand fair value of HK$40,320, as indicated by recent transactions involving similar equipment. Freight and installation charges for the new equipment required a cash payment of HK$960.

Pronghorn Group has negotiated the purchase of a new piece of automatic equipment at a price of HK$6,160 plus trade-in, fo.b. factory. Pronghorn paid HK$6,160 cash and traded in used equipment. The used equipment had originally cost HK$54,560; it had a book value of HK$36,960 and a secondhand fair value of HK$40,320, as indicated by recent transactions involving similar equipment. Freight and installation charges for the new equipment required a cash payment of HK$960.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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