Willis Company trades in a printing press for a newer model.The cost of the old printing press was $60,000,and accumulated depreciation up to the date of the trade-in is $43,000.The company also pays $43,000 cash for the newer printing press.The fair market value of the newer printing press is $70,000.The journal entry to acquire the new printing press will require a debit to Printing Press for:

Question

Quizplus · Accepted Answer

Book value of old press = $60,000 - $43,000 = $17,000
Implied fair value of old press = $70,000 new press fair value - $43,000 cash paid = $27,000
Fair value given up: $27,000 old press + $43,000 cash paid = $70,000

Willis Company Trades in a Printing Press for a Newer