Cedric Company recently traded in an older model of equipment 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 t

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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 $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 t

Cedric Company recently traded in an older model of equipment 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.

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.)

college accounting

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Answer 1

Answer #1

dr. equipment- new 480,000

dr. accumulated depreciation 420,000

cr. gain on exchange of assets 40,000

cr. cash 80,000

cr. equipment-old 780,000

equipment 400,000+80,000= 480,000

gain= 400,000-360,000= 40,000

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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 $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 t

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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 $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 t

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