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? v2.cengagenow.com/irn/takeAssignment/takeAssignmentMain.doinvokerassig il 13 OCIS146 Blackboard Learn MEC0231?BUS241 Calculator On October 1, Sebastian Company acquired new equipment with a fair market value of $45 and paid cash of $366.00o. The following information about the old equipment is obtained December 31.,the end of the praceding facal year, $20,000 annual depreciation. $20,00 Assuming the exchange has commercial substance, journalize the entries to record: a. The current depreciation of the old equipment to the date of trade-in. b. The exchange transaction on October 1. If an amount box does not require a n entry, leav All work saved

Explanation / Answer

Solution:

Preparing the Journal Entries for the Following:

Event Account Titles & Explanations Debit Credit a The current depreciation of the old equipment to the date of trade-in Depreciation Expense - Equipment $15,000 Accumulated Depreciation - Equipment (20,000 * 9/12) $15,000 b The exchange transaction on October 1. Accumulated Depreciation - Equipment $235,000 Equipment $458,000 Loss on Exchange of Equipment $9,000 Equipment $336,000 Cash $366,000

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