Khong Guan has negotiated the purchase of a new piece of automatic equipment at a price of HK$7,000 plus trade-in, f.o.b. factory. Yintang paid HK$7,000 cash and traded in used equipment. The used equipment had originally cost HK$62,000; it had a book value of HK$42,000 and a secondhand fair value of HK$45,800, as indicated by recent transactions involving similar equipment. Freight and installation charges for the new equipment required a cash payment of HK$1,100. Instructions Prepare the general journal entry to record this transaction, assuming: a. the exchange has commercial substance. b. the exchange is without commercial substance

Khong Guan has negotiated the purchase of a new piece of automatic equipment at a price of HK$7,000 plus trade-in, f.o.b. factory. Yintang paid HK$7,000 cash and traded in used equipment. The used equipment had originally cost HK$62,000; it had a book value of HK$42,000 and a secondhand fair value of HK$45,800, as indicated by recent transactions involving similar equipment. Freight and installation charges for the new equipment required a cash payment of HK$1,100. Instructions Prepare the general journal entry to record this transaction, assuming: a. the exchange has commercial substance. b. the exchange is without commercial substance

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 10PA: Buchanan Imports purchased McLaren Corporation for $5,000,000 cash when McLaren had net assets worth...

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