Reference no: EM132990535
Problem - Partial year's depreciation; exchanging - In 2020, Staged Home Lid. completed the following transactions involving delivery trucks:
July 5 Traded in an old truck and paid $28, 100 in cash for furniture. The accounting records on July 5 showed the cost of the old truck at $55,500 and related accumulated depreciation of $9, 250. The furniture was estimated to have a six-year life and a $11,468 trade-in value. The invoice for the exchange showed these items:
Price of the furniture (equal to its fair value) $58,100
Trade-in allowance (30,600)
Total paid in cash $28,100
Dec. 31 Recorded straight- line depreciation on the furniture (to nearest whole month).
Required - Prepare journal entries to record the transactions.