21 Online teach X v2cengagenowcomilrntakeAssignmenttakeAssig

21 Online teach X v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invokerSearch for.. Writing a Position Paper eBook Calculator Entries for Trade of Fixed Asset On July 1, Twin Pines Co., a water distiller, acquired new bottling equipment trade-in allowance (fair market value) of $45,000 on the old equipment of a similar type old equipment is obtained from the account in the equipment ledger; cost, $18 preceding fiscal year, $120,000; annual depreciation, $12,000. Assume the exchange has commercial substance. with a list price (fair market value) of $220,000. Twin Pines received a and paid cash of $175,000. The following nformation abou 0,000; accumulated depreciation on December 31, the end of the a. Journalize the entry to record the current depreciation of the old equipment to the date of trade-in. Depreciation Expense-Equipment v Accumulated Depreciation-Equipment Remember that the amount given for the depreciation on the fixed assetis the annual amount b. Journalize the entry to record the exchange transaction on July 1. If an amount box does not require an entry, leave t blank. Denreciation-Equipment

Solution

Journal entries: Date Accounts title and explanation Debit $ Credit $ 1-Jul Depreciation expense Account Dr.\' 6000     Accumulated depreciation Account 6000 1-Jul Bottling Equipment(New) Account Dr. 220000 Accumulated depreciation Account Dr. 126000 Loss on sale of assets account Dr. 9000      Old equipment Account 180000      Cash account 175000