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 $360,000 (original cost of $780,000 less $420,000 in accumulated depreciation) and its fair value was $400,000. Cedric paid $80,000 to complete the exchange which has commercial substance.

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.)

Cedric Company recently traded in an older model computer for a new model. The old model’s book value was $360,000 (original cost of $780,000 less $420,000 in accumulated depreciation) and its fair value was $400,000. Cedric paid $80,000 to complete the exchange which has commercial substance.

Explanation / Answer

Equipment—new 480000 Accumulated depreciation 420000            Cash 80000            Equipment—old 780000            Gain 40000

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.