Prepare the Journal Entries to Record the Following Transactions for Eklund

question 42

Essay

Prepare the journal entries to record the following transactions for Eklund Company which has a calendar year end and uses the straight-line method of depreciation.
a) On September 30, 2014, the company exchanged old delivery equipment and $24,000 for new delivery equipment. The old delivery equipment was purchased on January 1, 2012, for $84,000 and was estimated to have a $12,000 residual value at the end of its 5-year life. Depreciation on the delivery equipment has been recorded through December 31, 2013. It is estimated that the fair value of the old delivery equipment is $39,000 on September 30, 2014.
(b) On June 30, 2014, the company exchanged old office equipment and $40,000 for new office equipment. The old office equipment originally cost $80,000 and had accumulated depreciation to the date of disposal of $35,000. It is estimated that the fair value of the old office equipment on June 30 was $50,000. The transaction has commercial substance.

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Definitions:

Mass

Mass is a fundamental property of physical objects that quantifies the amount of matter they contain. It is a determinant of an object's resistance to acceleration when a force is applied.

Nuclear Reactor

A facility constructed to initiate and control a sustained nuclear chain reaction, used either to generate electricity or produce radioactive isotopes.

Uranium-235

A naturally occurring isotope of uranium that is fissile, making it critical for nuclear power generation and nuclear weapons.

Fusion Reaction

A nuclear reaction where two light atomic nuclei combine to form a heavier nucleus, releasing a large amount of energy.