A company decides to exchange its old machine and $231,000 cash for a new machine. The old machine has a book value of $189,000 and a fair value of $210,000 on the date of the exchange.The cost of the new machine would be recorded at

Question

Quizplus · Accepted Answer

The cost of the new machine is determined by adding the fair value of the old machine ($210,000) to the cash paid ($231,000), which equals $441,000.

A Company Decides to Exchange Its Old Machine and $231,000