Question: On October 1 Bentley Delivery Services acquired a new truck

On October 1, Bentley Delivery Services acquired a new truck with a list price (fair market value) of $75,000. Bentley Delivery received a trade-in allowance (fair market value) of $24,000 on an old truck of similar type and paid cash of $51,000. The following information about the old truck is obtained from the account in the equipment ledger: cost, $56,000; accumulated depreciation on December 31, the end of the preceding fiscal year, $35,000; annual depreciation, $7,000. Assuming the exchange has commercial substance, journalize the entries to record
(a) The current depreciation of the old truck to the date of trade-in
(b) The transaction on October 1.

View Solution:

Sale on SolutionInn
  • CreatedFebruary 28, 2014
  • Files Included
Post your question