A company exchanges its old office equipment and $60,000 for new office equipment. The old office equipment has a book value of $42,000 and a fair value of $30,000 on the date of the exchange. The cost of the new office equipment would be recorded at

Question

Quizplus · Accepted Answer

The cost of the new office equipment would be recorded at the fair value of the old office equipment plus the cash paid. Therefore, the cost of the new office equipment would be $30,000 + $60,000 = $90,000.

A Company Exchanges Its Old Office Equipment and $60,000 for New