XZ Owned Asset a That Was Reflected in the Accounts

question 68

Essay

XZ owned Asset A that was reflected in the accounts as: cost, $30,000 and accumulated amortization, $20,000. Its market value in present condition is reliably estimated to be $12,000. XZ acquired Asset B (a similar asset) that had a firm cash price of $16,000. The asset acquired (B) was paid for by trading in Asset A and paying cash of $8,000.
Give the entry XZ should make to record this transaction.

---

Definitions:

Mistake of Fact

A misunderstanding or incorrect belief regarding a fact that is material to a contract at the time of its formation, potentially rendering the contract voidable.

Non Est Factum

A legal defense in contract law where a person asserts they were mistaken about the fundamental nature of a contract they signed, rendering it void.

Guarantee Indebtedness

An obligation or commitment by one party to assume responsibility for the debt of another if they default.

Statute of Frauds

A legal principle requiring certain types of contracts to be written and signed to be enforceable.