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Financial Accounting
Learn the toughest concepts covered in your Financial Accounting class with step-by-step video tutorials and practice problems.
Long Lived Assets
Exchange for Similar Assets
1
concept
Asset Exchanges
11m
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2
Problem
ABC Company decided to exchange its old printer for a new printer. The old printer was purchased for $1,600 and had accumulated depreciation of $1,200. The seller of the new printer offered $300 as a trade-in discount for the old printer. The new printer had a price of $1,800. This transaction has commercial substance. The journal entry to record this exchange would include:
A
Credit to Cash for $1,800
B
Credit to Equipment for $400
C
Debit to Cash for $300
D
Debit to Accumulated Depreciation for $1,200