Exchange of Assets at Gain or Loss: Exchange of assets for other assets is recorded in the books by debiting the new assets for fair market value of new assets and closing the accounts of the old assets by crediting the assets and debiting the respective accumulated depreciation account. The Fair value of new assets less any cash paid shall be taken as net sales consideration of old assets and compared with the book value of old assets to find out the loss on gain on exchange of assets. TheJournal entries for the exchange of Equipment.

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Chapter 10, Problem S10A.16SE

To determine

Exchange of Assets at Gain or Loss:

Exchange of assets for other assets is recorded in the books by debiting the new assets for fair market value of new assets and closing the accounts of the old assets by crediting the assets and debiting the respective accumulated depreciation account.

The Fair value of new assets less any cash paid shall be taken as net sales consideration of old assets and compared with the book value of old assets to find out the loss on gain on exchange of assets.

TheJournal entries for the exchange of Equipment.

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