Question - On June 30, 2011, Russ Company exchanged an old painting equipment and $19,200 for new painting equipment. The old equipment was purchased on january 1, 2009, for $67,200 and was estimated to have a $9,600 salvage value at the end of its 5 years life. Depreciation on the equipment has been recorded through December 31, 2010. It is estimated that the fair market value of the old painting equipment is $ 28,800 on May 31, 2011.
Instructions: Prepare the journal entries to record the exchange of russ company painting equipment which has a calendar year end and uses the straight-line method of depreciation. Make sure to include the journal entries for the depreciation for the current year.
Question - On November 30, 2010, Marco Company exchanged old office equipment and $24,000 for new office equipment. The old office equipment originally cost $48,000 and had accumulated depreciation to the date of disposal of $21,000. It is estimated that the fair market value of the old office equipment on November 30 was $36,000. The transaction has commercial substance.
Instructions: Prepare the journal entries to record the exchange of Marco Company office equipment which has a calendar year end and uses the straight-line method of depreciation. Make sure to include the journal entries for the depreciation for the current year.