Equipment Costing $118,000 Has Accumulated Depreciation of $92,000

question 10

Multiple Choice

Equipment costing $118,000 has accumulated depreciation of $92,000.The equipment is a trade-in for new equipment costing $187,000.If the trade-in value received for the old equipment is $30,000,the journal entry to record this transaction is to:

• A)debit Equipment (New)for $187,000,debit Accumulated Depreciation - Equipment for $92,000,credit Equipment (Old)for $118,000 and credit Cash for $161,000.
• B)debit Equipment (New)for $187,000,debit Accumulated Depreciation - Equipment for $92,000,credit Equipment (Old)for $118,000,credit Cash for $157,000,and credit Gain on Exchange of Assets for $4,000.
• C)debit Equipment (New)for $187,000,debit Accumulated Depreciation - Equipment for $92,000,debit Loss on Exchange of Assets for $26,000,credit Equipment (Old)for $118,000 and credit Cash for $187,000.
• D)debit Equipment (New)for $187,000,and credit Cash for $187,000.

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