Brief E Sunland Company traded a used welding machine (cost $10,080, accumul ate

Question

Brief E Sunland Company traded a used welding machine (cost $10,080, accumul ated depreciation $3,360) for office equipment with an estimated fair value of S5,600. Sunland also paid $3,360 cash in the transaction. xercisc 10-10 Prepare the journal entry to record the exchange. (The exchange has commeroal subetance.) (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.) Debit Credit Account Titles and Explanation

Explanation / Answer

Journal entry required to record the exchange of welding machine is as prepared below:

Has commercial substance Sunland Company Date Particulars L.F Amount ($) Amount ($) Office Equipment (Fair value) 5,600 Accumulated depreciation (Book Value) 3,360 Loss on sale of welding machine (60,000-56,000) 4,480 Used Welding machine (Book Value) 10,080 Cash 3,360 (For equipment exchanged)

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