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how do you journalize

Accounting
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 traded in equipment with accumulated depreciation  of $67000 (cost of $134,000) for similiar new equipment with a cash cost of $177000. Recieved a trade-in  allowance of $71,000 on the old equipment and paid $106,000 in cash. record the transaction in roper's inc. journal

Apr 9th, 2015

Cost of Equipment Traded In
$134,000

Less: Accumulated Depreciation
($67,000)

Net Book Value
$67,000

Trade-In Value
($71,000)

Gain on Exchange
$4,000

Since this is a similar exchange, gains are deferred and reduce the cost of the new asset. The gain on exchange is not recognized and instead reduces the initial value of the new equipment when it is first recorded. Thus the journal entry would be as follows:

  DebitCredit
Equipment
$173,000

Accumulated Depreciation - Equipment
$67,000

          Equipment

$134,000
          Cash

$106,000




Apr 9th, 2015

Thank you Ryan!

Apr 9th, 2015

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