Record the journal entries for the truck sold

Assignment Help Accounting Basics

Reference no: EM132477612

Point 1: Exchanged a printer (Office Equipment) that had an original cost of $ 6,540 when purchased on January 4, 2017. The useful life of the old asset was originally estimated at six years and the salvage value at $ 180. The new printer had a price and market value of $ 9,280. Jarred gave up the old machine and paid $ 4,640 cash.

Point 2: The new printer is estimated to have a useful life of five years and a salvage value of $ 58e. eBook References July 19 Exchanged a truck (Vehicles) for a new one that had a sales price, and fair 300 on the old truck value, of $ 42,400. Receivedi a trade-in allowance of and paid cash of $ 32, 100.

Point 3: The old truck had been purchased for $ 33,920 on May 27, 2016, three years earlier. The life of the old truck was originally estimated at four years and the salvage value at $ 5,600. The life of the new truck is estimated to be five years and it is estimated to have a salvage value of $ 8,600. Sold a truck that was purchased on January 5, 2017, for n original purchase price of $ 39,920. It had an estimated life of four years and an estimated salvage value of $ 6,800. Sales price is as indicated in Instructions, below. Aug. 18

Required: Note: In the following these instructions, assume that straight-line depreciation is used and that depreciation was last recorded on December 31, 2018. (Note: The presentation in the text related to the exchanges of assets has been superseded by FAS 153 .

Under FAS 153, gains and losses on the exchange of assets that have commercial substance are recognized in full. The deferral of gains (by reducing the basis in the new asset) only pertains to assets that lack commercial substance.)

Question 1. Prepare the journal entries to record the two exchange transactions.

Question 2. Record the journal entries for the truck sold on August 18

Reference no: EM132477612

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