Question

During 2014, Global Packaging Plus Co. had the following transactions.
Aug. 31 2014 Global traded-in furniture with a cost of $42,000 and accumulated depreciation of $25,800 recorded in the accounting records on this date. Global paid $56,400 in cash for a computer system that was estimated to have a three-year life and a $19,200 residual value. The invoice for the exchange showed these items:
Price of the computer equipment ........................................................................ $ 74,400
Trade-in allowance granted on the furniture........................................................ (18,000)
Total paid in cash ................................................................................................ $ 56,400

Sept. 4 paid $11,760 for upgrades to the computer equipment, which increased the economic benefits flowing from the equipment.
Dec. 31 Recorded straight-line depreciation on the computer equipment to the nearest whole month. Round calculations to the nearest whole dollar.

Required
Prepare journal entries to record the transactions. Assume that the fair values were not known at the time of the exchange.



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  • CreatedJanuary 08, 2015
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