Cedric Company recently traded in an older model of equipment for a new model. The old model’s book value was $400,000 (original cost of $820,000 less $420,000 in accumulated depreciation) and its fair value of the old equipment is $370,000. Cedric paid $

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Cedric Company recently traded in an older model of equipment for a new model. The old model’s book value was $400,000 (original cost of $820,000 less $420,000 in accumulated depreciation) and its fair value of the old equipment is $370,000. Cedric paid $

Cedric Company recently traded in an older model of equipment for a new model. The old model’s book value was $400,000 (original cost of $820,000 less $420,000 in accumulated depreciation) and its fair value of the old equipment is $370,000. Cedric paid $80,000 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.)

Intermediate-Accounting-I

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Answer 1

Answer #1

	Debit	Credit
New Equipment	450000
Accumulated depreciation	420000
Loss	30000
Cash		80000
Old Equipment		820000
	900000	900000


New Equipment = 370000+80000
Loss = 370000-400000

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Answer 2

Cedric Company recently traded in an older model of equipment for a new model. The old model’s book value was $400,000 (original cost of $820,000 less $420,000 in accumulated depreciation) and its fair value of the old equipment is $370,000. Cedric paid $

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Cedric Company recently traded in an older model of equipment for a new model. The old model’s book value was $400,000 (original cost of $820,000 less $420,000 in accumulated depreciation) and its fair value of the old equipment is $370,000. Cedric paid $

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