Whispering Co. had a sheet metal cutter that cost $100,000 on January 5, 2021. This old cutter had an estimated life of ten years and a salvage value of $17,000. On April 3, 2026, the old cutter is exchanged for a new cutter with a fair value of $60,000. The exchange lacked commercial substance. Whispering also received $15,000 cash. Assume that the last fiscal period ended on December 31, 2025, and that straight-line depreciation is used. (b) Prepare all entries that are necessary on April 3, 2026. (Credit account titles are automatically indented when the 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. Record journal entries in the order presented in the problem.)

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Whispering Co. had a sheet metal cutter that cost $100,000 on January 5, 2021. This old cutter had an estimated life of ten years and
a salvage value of $17,000. On April 3, 2026, the old cutter is exchanged for a new cutter with a fair value of $60,000. The exchange
lacked commercial substance. Whispering also received $15,000 cash. Assume that the last fiscal period ended on December 31,
2025, and that straight-line depreciation is used.
(b)
Prepare all entries that are necessary on April 3, 2026. (Credit account titles are automatically indented when the 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. Record journal entries in the order presented in the problem.)
Account Titles and Explanation
Cost of Goods Sold
(To record depreciation.)
(To record exchange of machineries.)
Debit
Credit
Transcribed Image Text:Whispering Co. had a sheet metal cutter that cost $100,000 on January 5, 2021. This old cutter had an estimated life of ten years and a salvage value of $17,000. On April 3, 2026, the old cutter is exchanged for a new cutter with a fair value of $60,000. The exchange lacked commercial substance. Whispering also received $15,000 cash. Assume that the last fiscal period ended on December 31, 2025, and that straight-line depreciation is used. (b) Prepare all entries that are necessary on April 3, 2026. (Credit account titles are automatically indented when the 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. Record journal entries in the order presented in the problem.) Account Titles and Explanation Cost of Goods Sold (To record depreciation.) (To record exchange of machineries.) Debit Credit
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