When a Company Exchanges Machinery and Receives a Trade-In Allowance

question 223

Multiple Choice

When a company exchanges machinery and receives a trade-in allowance less than the book value, this transaction would be recorded with which of the following entries?

• A) debit Machinery and Accumulated Depreciation; credit Machinery and Cash
• B) debit Cash and Machinery; credit Accumulated Depreciation
• C) debit Cash and Machinery; credit Accumulated Depreciation and Machinery
• D) debit Machinery, Accumulated Depreciation, and Loss on Exchange of Machinery; credit Machinery and Cash

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