Question: On June 25 Wynn Assemblers trades in a machine for
On June 25, Wynn Assemblers trades in a machine for a new one priced at $ 8,460, receiving a trade-in allowance of $ 1,500 on the old machine. Wynn Assemblers makes a down payment of $ 1,200 in cash and issues a 60- day, 9 percent note for the remainder. The property and equipment record shows the following: cost (of old machine), $ 6,000; accumulated depreciation as of last December 31, $ 4,800; monthly depreciation, $ 100. Assuming that this exchange has “commercial substance,” make entries in general journal form to record the depreciation of the old machine to date and to record the trade-in and purchase of the new machine.
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