Exchange of plant assets: It refers to the purchase of new plant assets in exchange of old plant assets. C ommercial substance: It means that the exchange of the plant asset cause changes in the future cash flows as more revenue will generate from the new plant asset due to an increase in its productivity. Thus, if the revenue earned or expenses incurred changes in the future due to the exchange of plant assets, then it will be referred as the exchange has a commercial substance. To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

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Answer 1

Question

Chapter 9, Problem 9.28E

1.

To determine

Exchange of plant assets: It refers to the purchase of new plant assets in exchange of old plant assets.

Commercial substance: It means that the exchange of the plant asset cause changes in the future cash flows as more revenue will generate from the new plant asset due to an increase in its productivity. Thus, if the revenue earned or expenses incurred changes in the future due to the exchange of plant assets, then it will be referred as the exchange has a commercial substance.

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

2.

To determine

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

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Monty Corp. exchanges old delivery equipment for new delivery equipment. The book value of the old delivery equipment is $37,200 (cost $67,200 less accumulated depreciation $30,000). Its fair value is $23,100, and cash of $6,000 is paid. Prepare the entry to record the exchange, assuming the transaction has commercial substance. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry isrequired,select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit

Answer 2

Question

Chapter 9, Problem 9.28E

1.

To determine

Exchange of plant assets: It refers to the purchase of new plant assets in exchange of old plant assets.

Commercial substance: It means that the exchange of the plant asset cause changes in the future cash flows as more revenue will generate from the new plant asset due to an increase in its productivity. Thus, if the revenue earned or expenses incurred changes in the future due to the exchange of plant assets, then it will be referred as the exchange has a commercial substance.

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

2.

To determine

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

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Answer 3

Question

Chapter 9, Problem 9.28E

1.

To determine

Exchange of plant assets: It refers to the purchase of new plant assets in exchange of old plant assets.

Commercial substance: It means that the exchange of the plant asset cause changes in the future cash flows as more revenue will generate from the new plant asset due to an increase in its productivity. Thus, if the revenue earned or expenses incurred changes in the future due to the exchange of plant assets, then it will be referred as the exchange has a commercial substance.

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

2.

To determine

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

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Answer 4

Question

Chapter 9, Problem 9.28E

1.

To determine

Exchange of plant assets: It refers to the purchase of new plant assets in exchange of old plant assets.

Commercial substance: It means that the exchange of the plant asset cause changes in the future cash flows as more revenue will generate from the new plant asset due to an increase in its productivity. Thus, if the revenue earned or expenses incurred changes in the future due to the exchange of plant assets, then it will be referred as the exchange has a commercial substance.

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

2.

To determine

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

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Answer 5

Chapter 9, Problem 9.28E

1.

To determine

Exchange of plant assets: It refers to the purchase of new plant assets in exchange of old plant assets.

Commercial substance: It means that the exchange of the plant asset cause changes in the future cash flows as more revenue will generate from the new plant asset due to an increase in its productivity. Thus, if the revenue earned or expenses incurred changes in the future due to the exchange of plant assets, then it will be referred as the exchange has a commercial substance.

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

2.

To determine

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

Answer 6

Chapter 9, Problem 9.28E

1.

To determine

Exchange of plant assets: It refers to the purchase of new plant assets in exchange of old plant assets.

Commercial substance: It means that the exchange of the plant asset cause changes in the future cash flows as more revenue will generate from the new plant asset due to an increase in its productivity. Thus, if the revenue earned or expenses incurred changes in the future due to the exchange of plant assets, then it will be referred as the exchange has a commercial substance.

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

Answer 7

Chapter 9, Problem 9.28E

1.

To determine

Exchange of plant assets: It refers to the purchase of new plant assets in exchange of old plant assets.

Commercial substance: It means that the exchange of the plant asset cause changes in the future cash flows as more revenue will generate from the new plant asset due to an increase in its productivity. Thus, if the revenue earned or expenses incurred changes in the future due to the exchange of plant assets, then it will be referred as the exchange has a commercial substance.

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

Answer 8

2.

To determine

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

Answer 9

2.

To determine

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

Answer 10

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Answer 11

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Answer 12

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Answer 13

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Solution Summary: The author explains the accounting equation for Bank C's trade-in of old fixtures for new ones.

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

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Chapter 9 Solutions