Prepare the journal entry to record the transaction

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Question - On December 31, 2020, Westcoast Publications traded in its old printing press to acquire a new press that had a list price of $275,000. At the time of the trade, an appraiser determined that the old press had a fair value of $100,000. The seller of the press agreed to give Westcoast a $125,000 trade in allowance on the old press and Westcoast paid the remaining $150,000 in cash. The old press cost $190,000 when it was purchased exactly six years previously. When the old press was purchased, Westcoast estimated that it would have a useful life of 10 years and would have a residual value of $30,000. Westcoast used the straight-line method to depreciate the old press. Assume that this asset exchange has commercial substance, and that Westcoast recorded the 2020 depreciation expense for the old press prior to the trade.

Required - Prepare the journal entry to record the above-noted transaction. Show your calculations. Explanations are not required.

Reference no: EM132823124

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