During the Current Year,a Company Acquired a New Computer with a Cash

question 25

Essay

During the current year,a company acquired a new computer with a cash price of $12,800 by exchanging an old one on which the company received a $1,500 trade-in allowance (with the balance of $11,300 paid in cash).The old computer cost $9,000 and its accumulated depreciation was $5,500 as of the exchange date.Assuming the exchange transaction had commercial substance,prepare the journal entry to record the exchange.

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Definitions:

Tax Revenue

The income that is collected by the government through various forms of taxes, used to fund public services and obligations.

Government Spending

Expenditures by government bodies on goods and services that influence the economy's overall activity.

Recessionary Gap

A situation in macroeconomics when an economy operates below its full-employment equilibrium, leading to a gap in output.

Government Spending

The total amount of public expenditure by government entities on goods, services, and public projects.