Journal entry to record the exchange. Given Information: Cost of machine acquired on January 1, 2010 is $260,000. Useful life of machinery is 10 years. Scrap value of the machinery is $20,000. On August 1, 2015; old machine was exchanged for new machine. Market value of new machinery is $157,250. Cash received mounted to $27,750. Fair value of old machine is $185,000.

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Chapter 11, Problem 11.32E

To determine

To prepare: Journal entry to record the exchange.

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

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