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Exchange of Equipment - Journal Entry

ACCT 731 P22
Equipment that cost $80,000 and has accumulated depreciation of $63,000 is exchanged for similar equipment with a fair value of $35,000 and $15,000 cash is received. The exchange lacked commercial substance.

Directions: Respond to these questions on a separate Excel spreadsheet as directed on the Problem Set 3 directions.
a) Show the calculation of the gain to be recognized from the exchange.

b) Prepare the entry for the exchange.

Solution Summary

The solution prepare the entry for the exchange of equipment with new and calculate of the gain to be recognized from the exchange.

$2.19