An Entity Acquired an Item of Machinery in Exchange for a Motor

question 3

Multiple Choice

An entity acquired an item of machinery in exchange for a motor vehicle. The carrying amount of the machinery is $8000 and its fair value is $10 000. The journal entry to record the acquisition of the machinery will include:

• A) a loss on acquisition of $2000.
• B) a gain on sale of $2000.
• C) proceeds on sale of motor vehicle of $2000.
• D) proceeds on sale of machinery of $2000.

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Definitions:

Interest

A charge for borrowed money, generally a percentage of the amount borrowed or the enthusiasm for or attention dedicated to a particular subject or activity.

Energy Level

The degree of vitality or physical and mental stamina an individual has available for activities.

Concentration

The action or power of focusing one's attention or mental effort on a specific object or activity.

Outlining

Creating a general structure for a piece of writing, presentation, or project, highlighting its main points.