On January 1, a business trades in an old piece of equipment, plus some cash, for...

On January 1, a business trades in an old piece of equipment, plus some cash, for a new similar piece of equipment. The exchange transaction HAS commercial substance. The following information applies to this transaction:

Acquisition cost of old equipment $50,000

Book value of old equipment $15,000

Additional cash payment at time of trade $25,000

Market value of new equipment see below

Prepare the necessary journal entry to record this transaction on January 1 assuming the new equipment has a fair market value of $38,000.

Prepare the necessary journal entry to record this transaction on January 1 assuming the new equipment has a fair market value of $42,000.

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ekkarill92 answered 1 year ago

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