Skysong Corporation, which manufactures shoes, hired a recent college graduate t

Question

Skysong Corporation, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first day of work, the accountant was assigned to total a batch of invoices with the use of an adding machine. Before long, the accountant, who had never before seen such a machine, managed to break the machine. Skysong Corporation gave the machine plus $354 to Concord Business Machine Company (dealer) in exchange for a new machine. Assume the following information about the machines.

Skysong Corp.
(Old Machine)

Concord Co.
(New Machine)

For each company, prepare the necessary journal entry to record the exchange. (The exchange has commercial substance.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation

Debit

Credit

Skysong Corporation

Concord Business Machine Company

Skysong Corp.
(Old Machine)

Concord Co.
(New Machine)

Machine cost $302 $281 Accumulated depreciation 146 –0– Fair value 88 442

Explanation / Answer

For each company, prepare the necessary journal entry to record the exchange. (The exchange has commercial substance.)

Date accounts & explanation debit credit Skysong Corporation Machine a/c (NEW) (88+354) 442 Accumlated depreciation a/c 146 Loss on exchange 68 Machine a/c (OLD) 302 Cash a/c 354 (To record exchange of machine) Concord Business Machine Company Cash a/c 354 Machine a/c (NEW) 88 Gain on exchange 161 Machine a/c (OLD) 281 (To record exchange)

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

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