Ward Company purchased an electric press on June 30, 2015, by trading in its old gas model and…

Ward Company purchased an electric press on June 30, 2015, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase.List price of new press …………….. $24,800Cash paid …………………. 12,000Cost of old press (10-year life, $1,000 residual value) …. 35,000Accumulated depreciation—old press (straight-line) …… 27,200Second-hand market value of old press ……….. 6,600InstructionsPrepare the journal entry(ies) necessary to record this exchange, assuming that the exchange (a) Has commercial substance, (b) Lacks commercial substance. Ward’s fiscal year ends on December 31, and depreciation has been recorded through December 31, 2014.View Solution:
Ward Company purchased an electric press on June 30 2015

 

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