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    owens's Avatar
    owens Posts: 5, Reputation: 1
    New Member

    Feb 23, 2006, 02:56 PM
    Trade In Of An Asset
    On December 1, 2005, Cutting Edge Traded An Old Piece Of Equipment
    For A Newer Model. The Following Information Pertains To This

    Old Machine:
    Original Cost 18,000
    Accumulated Depreciation As Of 12/1/05 13,500

    New Machine:
    List Price 22,500
    Cash Price Without Trade-in 21,000
    Cash Paid With Trade-in 19,050

    Can You Help Me Make The Journal Entry To Record The Purchase Of The New Machine And Also The Journal Entry If The Cash Paid Was 16,050?
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
    Ultra Member

    Feb 23, 2006, 03:31 PM
    Dr. New Machine 21,000 (value w/o trade in)
    Dr. Acc. Amort - Old Machine 13,500 (given)
    Cr. Old Machine 18,000 (given)
    Cr. Cash 19,050 (given)
    Dr. Loss 2,550

    The cash paid is 19,050 - as stated in your question:
    Cash Paid With Trade-in 19,050

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