Prepare journal entries to record the transactions

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Question - In 2020, Staged Home Ltd. completed the following transactions involving delivery trucks:

July 5: Traded in an old truck and paid $25,600 in cash for furniture. The accounting records on July 1 showed the cost of the old truck at $36,000 and related accumulated depreciation of $6,000. The furniture was estimated to have a six-year life and a $6,268 trade-in value. The invoice for the exchange showed these items:

Price of the furniture (equal to its fair value) $45,100

Trade-in allowance (19,500)

Total paid in cash $25,600

Dec.31: Recorded straight-line depreciation on the furniture (to nearest whole month).

Required - Prepare journal entries to record the transactions.

Reference no: EM132497294

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