Brief Exercise 10-10 Your answer is partially correct. Try again. Grouper Compan

Question

Brief Exercise 10-10 Your answer is partially correct. Try again. Grouper Company traded a used welding machine (cost $10,800, accumulated depreciation $3,600) for office equipment with an estimated fair value of $6,000. Grouper also paid $3,600 cash in the transaction. Prepare the journal entry to record the exchange. (The exchange has commercial substance.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit Accumulated Depreclation 8123 Equipment 6000 Loss on Disposal of Equipment 4800 Machinery 10800 Cash 3600

Explanation / Answer

The journal entry to record the exchange is shown as follows:-

  Journal Entry (Amounts in $)

Account Titles and Explanation Debit Credit Accumulated Depreciation-Machinery 3,600 Equipment (Fair value) 6,000 Loss on Disposal of Machinery (Bal. fig.) 4,800 Machinery (cost) 10,800 Cash 3,600

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