Equipment costing $73,000 has accumulated depreciation of $54,000. The equipment is a trade-in for new equipment costing $90,191. If the trade-in value received for the old equipment is $15,000, the journal entry to record this transaction is to:
A) debit Equipment (new) $90,191, credit Cash $90,191.
B) debit Equipment (New) for $90,191, debit Accumulated Depreciation - Equipment for $54,000, credit Equipment (Old) for $73,000 and credit Cash for $90,191.
C) debit Equipment (New) for $90,191, debit Accumulated Depreciation - Equipment for $54,000, debit Loss on Exchange of Assets for $19,000, credit Equipment (Old) for $73,000, credit Cash for $90,191.
D) debit Equipment (New) for $90,191, debit Accumulated Depreciation - Equipment for $54,000, debit Loss on Exchange of Assets for $4,000, credit Equipment (Old) for $73,000 and credit Cash for $75,191.
Correct Answer:
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