United Bank recently traded in office fixtures. Here are the facts: 

Requirements 

1. Record United Bank’s trade-in of old fixtures for new ones. Assume the exchange had commercial substance.

2. Now let’s change one fact. United Bank feels compelled to do business with Furniture Unlimited, a bank customer, even though the bank can get the fixtures elsewhere at a better price. United Bank is aware that the new fixtures’ fair value is only $127,000. Record the trade-in. Assume the exchange had commercial substance.

Transcribed Image Text:

Old fixtures: Cost, $96,000 Accumulated depreciation, $65,000 New fixtures: Cash paid, $103,000 Fair value, $134,000