Journalize the entries to record the current depreciation

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Problem - Entries for trade of fixed asset - On April 1, Clear Water Co., a water distiller, acquired new bottling equipment with a list price (fair market value) of $350,000. Clear Water received a trade-in allowance of $50,000 on the old equipment of a similar type and paid cash of $300,000. The following information about the old equipment is obtained from the account in the equipment ledger: cost, $280,000; accumulated depreciation on December 31, the end of the preceding fiscal year, $216,000; annual depreciation, $18,000. Assuming the exchange has commercial substance, journalize the entries to record (a) the current depreciation of the old equipment to the date of trade-in and (b) the exchange transaction on April 1.

Reference no: EM132877891

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