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25 December, 07:45

Whispering Company traded a used welding machine (cost $11,340, accumulated depreciation $3,780) for office equipment with an estimated fair value of $6,300. Whispering also paid $3,780 cash in the transaction. Prepare the journal entry to record the exchange. (The exchange has commercial substance.) g

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  1. 25 December, 08:11
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    Dr Equipment $6,300

    Dr Accumulated depreciation $3,780

    Dr Loss on disposal $5,040

    Cr Machinery $11,340

    Cr Cash $3,780

    Explanation:

    Whispering Company

    Journal entries

    Dr Equipment $6,300

    Dr Accumulated depreciation $3,780

    Dr Loss on disposal $5,040

    Cr Machinery $11,340

    Cr Cash $3,780

    Loss on disposal

    $6,300+$3780=$10,080

    $11,340+$3,780=$15,120

    $15,120-10,080=5,040
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