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    Exchange of Assets and Journal Entry

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    B.T. Corp, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first day off work, the accountant was assigned to total a batch of invoices with the use of an adding machine. Before long, the accountant, who had never before seen such a machine, managed to break the machine. B.T. Corp gave the machine plus $340 to Dick Tracy Business Company (dealer) in exchange for a new machine. Assume the following information about the machines.

    B.T. Corp Dick Tracey Co
    (old machine) (new machine)
    Machine cost $290 $270
    Accumulated depreciation 140 -0-
    Face value 85 425

    Instructions:
    For each company, prepare the necessary journal entry to record the exchange. (The exchange has commercial substance.)

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    https://brainmass.com/business/international-finance/exchange-assets-journal-entry-228685

    Solution Preview

    B.T. Corp, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first day off work, the accountant was assigned to total a batch of invoices with the use of an adding machine. Before long, the accountant, who had never before seen such a machine, managed to break the machine. B.T. Corp gave the machine plus $340 to Dick Tracy Business Company (dealer) in exchange for a new machine. ...

    Solution Summary

    The solution explains the journal entry relating to exchange of similar assets with commercial substance

    $2.19

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