When selling a piece of equipment for cash, a loss will result when the proceeds of the sale are less than the book value of the asset. ____ 17. A loan in which the lender deducts interest from the amount borrowed before the money is advanced to the borrower is called a discounted note. ____ 18. If a fixed asset with a book value of $10,000 is traded for a similar fixed asset, and a trade-in allowance of $15,000 is granted by the seller, the buyer would report a gain on disposal of fixed assets of $5,000 (assume this exchange lacks “Commercial Substance”).
- When selling a piece of equipment for cash, a loss will result when the proceeds of the sale are less than the book value of the asset.
____ 17. A loan in which the lender deducts interest from the amount borrowed before the money is advanced to the borrower is called a discounted note.
____ 18. If a fixed asset with a book value of $10,000 is traded for a similar fixed asset, and a trade-in allowance of $15,000 is granted by the seller, the buyer would report a gain on disposal of fixed assets of $5,000 (assume this exchange lacks “Commercial Substance”).
____ 19. The book value of a fixed asset reported on the balance sheet represents its market value on that date.
____ 20. In order to be a recorded
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