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3 November, 23:28

Cedric Company recently traded in an older model of equipment for a new model. The old model's book value was $252,000 (original cost of $552,000 less $300,000 in accumulated depreciation) and its fair value was $280,000. Cedric paid $68,000 to complete the exchange which has commercial substance. Required:

Prepare the journal entry to record the exchange. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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  1. 4 November, 01:40
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    General Journal

    Dr Cr

    Equipment - new 348,000

    Accumulated depreciation 300,000

    Cash 68,000

    Equipment - old 552,000

    Gain 28,000

    Workings:

    Equipment - new ($280,000 + 68,000) = $348,000

    Gain ($280,000 - 252,000) = $28,000
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