Answered: ruck 14,000 Cash to be paid 56,000

Business

Accounting

ruck 14,000 Cash to be paid 56,000

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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Question

On January 2, 2020, Raid Delivery Company traded in an old delivery truck for a newer model. The exchange lacked commercial substance. Data relative to the old and new trucks follow:

-Old Truck

Original cost $45,000

Accumulated depreciation as of January 2, 2020 30,000

-New Truck

List price 75,000

The FV of old Truck 14,000

Cash to be paid 56,000

What is the journal entry for the trade?

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Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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