A computer server system, which had cost $250,000 and had accumulated depreciation of $170,000, was traded for a new system with a fair market value of $245,000. The old system and cash of $210,000 were given for the new system
Prepare the journal entry for the exchange of these similar assets assuming the income tax method is used to record the exchange.
What will be an ideal response?
Answer:
Computer Server (new) 290,000
Accum Depr. (old) 170,000
Cash 210,000
Computer Server (old) 250,000
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