Asked by carson Southwell on May 06, 2024
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A computer server system, which had cost $250,000 and had accumulated depreciation of $170,000, was traded for a new system with a fair market value of $245,000. The old system and cash of $190,000 were given for the new system. Prepare the journal entry for the exchange of these similar assets.
Accumulated Depreciation
The total depreciation costs applied to a fixed asset from the time of its acquisition.
Fair Market Value
The price at which a willing buyer and a willing seller, both possessing reasonable knowledge of relevant facts, would exchange an asset.
Journal Entry
A record in the books of accounts that represents a business transaction, involving at least two accounts to record the financial activity.
- Gain proficiency in journal entry formulation for fixed asset disposal and discern its influence on financial statements.
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Learning Objectives
- Gain proficiency in journal entry formulation for fixed asset disposal and discern its influence on financial statements.
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