Mathison Company exchanged a worn-out tractor that had cost $30,000 and was half depreciated for a new tractor with a fair value of $12,000. Mathison paid an additional $4,500 cash. The transaction lacked commercial substance.
Required:
Compute the amount at which Mathison should record the new tractor.

Question

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The Answer of Mathison Company exchanged a worn-out tractor that had cost $30,000 and was half depreciated for a new tractor with a fair value of $12,000. Mathison paid an additional $4,500 cash. The transaction lacked commercial substance.
Required:
Compute the amount at which Mathison should record the new tractor.

Mathison Company Exchanged a Worn-Out Tractor That Had Cost $30,000