Author Question: Equipment costing $118,000 has accumulated depreciation of $92,000. The equipment is a trade-in for ... (Read 174 times)

tiffannnnyyyyyy · **on:** Feb 18, 2020

Equipment costing $118,000 has accumulated depreciation of $92,000. The equipment is a trade-in for new equipment costing $191,000. If the trade-in value received for the old equipment is $35,000, the journal entry to record this transaction is to:
◦ debit Equipment (New) for $191,000, and credit Cash for $191,000.
◦ debit Equipment (New) for $191,000, debit Accumulated Depreciation – Equipment for $92,000, credit Equipment (Old) for $118,000 and credit Cash for $165,000.
◦ debit Equipment (New) for $191,000, debit Accumulated Depreciation – Equipment for $92,000, credit Equipment (Old) for $118,000, credit Cash for $156,000, and credit Gain on Exchange of Assets for $9,000.
◦ debit Equipment (New) for $191,000, debit Accumulated Depreciation – Equipment for $92,000, debit Loss on Exchange of Assets for $26,000, credit Equipment (Old) for $118,000 and credit Cash for $191,000.

coyin · **Reply #1 on:** Feb 18, 2020

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