On April 1,Fog Company traded an old machine that originally cost $32,000 and had been depreciated $24,000 for a new machine that had a cash price of $40,000.Assuming that this transaction has commercial substance,(1)Prepare the journal entry to record the exchange under the assumption that a $5,000 trade-in allowance was received and the balance was paid in cash.(2)Prepare the journal entry to record the exchange under the assumption that instead of a $5,000 trade-in allowance,a $12,500 trade-in allowance was received and the balance was paid in cash.

Question

Quizplus · Accepted Answer

The Answer of On April 1,Fog Company traded an old machine that originally cost $32,000 and had been depreciated $24,000 for a new machine that had a cash price of $40,000.Assuming that this transaction has commercial substance,(1)Prepare the journal entry to record the exchange under the assumption that a $5,000 trade-in allowance was received and the balance was paid in cash.(2)Prepare the journal entry to record the exchange under the assumption that instead of a $5,000 trade-in allowance,a $12,500 trade-in allowance was received and the balance was paid in cash.

On April 1,Fog Company Traded an Old Machine That Originally