On January 1, 2015, The Bargain Bin owned capital asset X that was reflected in the accounts as follows: Cost, $20,000; accumulated amortization, $15,000. The company acquired capital asset Y that had a nonnegotiable actual cash price of $10,750. In full payment, Asset X was traded in and cash of $6,000 was paid by The Bargain Bin.
Give the journal entry required for The Bargain Bin under each of the two independent assumptions:
Assumption A-Similar assets.
Assumption B-Dissimilar assets.

Question

Quizplus · Accepted Answer

The Answer of On January 1, 2015, The Bargain Bin owned capital asset X that was reflected in the accounts as follows: Cost, $20,000; accumulated amortization, $15,000. The company acquired capital asset Y that had a nonnegotiable actual cash price of $10,750. In full payment, Asset X was traded in and cash of $6,000 was paid by The Bargain Bin.
Give the journal entry required for The Bargain Bin under each of the two independent assumptions:
Assumption A-Similar assets.
Assumption B-Dissimilar assets.

On January 1, 2015, the Bargain Bin Owned Capital Asset