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16 June, 17:41

Pronghorn Corporation traded a used truck (cost $20,000, accumulated depreciation $18,000) for a small computer worth $3,498. Pronghorn also paid $530 in the transaction. Prepare the journal entry to record the exchange, assuming the exchange lacks commercial substance.

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  1. 16 June, 17:54
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    Truck:

    Cost = $20,000

    Accumulated depreciation = $18,000

    Small computer worth = $3,498

    Paid in transaction = $530

    The Journal entry is as follows:

    Equipment/Computer A/c Dr. $3,498

    Accumulated depreciation-Truck A/c Dr. $18,000

    To Truck $20,000

    To Gain on disposal of truck $968

    To cash $530

    (To record the exchange)
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