A Company Exchanged an Old Automobile for a Newer Model

question 23

Essay

A company exchanged an old automobile for a newer model.The old automobile account had a cost of $36,000 and accumulated depreciation of $25,000 as of the exchange date.The new automobile had a cash price of $34,000,but the company was given a $15,000 trade-in allowance and the balance of $19,000 was paid in cash.Prepare the journal entry to record the exchange,if the transaction lacks commercial substance.

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Definitions:

Future

The time or a period of time following the moment of speaking or writing; time regarded as still to come.

Functionalists

In psychology, a school of thought focusing on the mental processes and behaviors that help an organism adapt to its environment.

Behavior

Behavior refers to the actions or reactions of an individual or group in response to external or internal stimuli, and is a primary focus of study in psychology.

Organism

A living entity capable of growing and reproducing.