An Entity Acquired an Item of Plant in Exchange for an Item

question 33

Multiple Choice

An entity acquired an item of plant in exchange for an item of equipment. The equipment has a carrying amount of $15 000 and a fair value of $20 000. The journal entry to record the acquisition of the plant will show:

• A) a loss on acquisition of $5000.
• B) a gain on sale of $5000.
• C) proceeds on sale of equipment of $15 000.
• D) proceeds on sale of plant of $15 000.