Cedric Company recently traded in an older model computer for a new model. The o

Question

Cedric Company recently traded in an older model computer for a new model. The old model's book value was $216,000 (original cost of $476,000 less $260,000 in accumulated depreciation) and its fair value was $240,000. Cedric paid $64,000 to complete the exchange which has commercial substance. Required Prepare the journal entry to record the exchange. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the exchange of assets. Note: Enter debits before credits. Event General Journal Debit Record entry Clear entry View general joumal

Explanation / Answer

Journal entry :

Event General journal Debit credit 1 Accumlated depreciation 260000 Computer (new) 240000 Gain on record of exchange 40000 Computer (old) 476000 Cash 64000 (To record of exchange of assets)

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