Exercise 10-18 Pronghorn Company purchased an electric wax meter on April 30, 2017, by trading in its...

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Accounting

Exercise 10-18
Pronghorn Company purchased an electric wax meter on April 30,2017, by trading in its old gas model and paying the balance incash. The following data relate to the purchase.
List price of new meter $19,276
Cash paid 12,200
Cost of old meter (5-year life, $854 salvage value) 13,664
Accumulated Depreciation-old meter (straight-line) 7,686
Secondhand fair value of old meter 6,344

Prepare the journal entries necessary to record this exchange,assuming that the exchange (a) has commercial substance, and (b)lacks commercial substance. Pronghorn’s fiscal year ends onDecember 31, and depreciation has been recorded through December31, 2016. (Credit account titles are automaticallyindented when amount is entered. Do not indent manually. If noentry is required, select "No Entry" for the account titles andenter 0 for the amounts.)

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Answer Preparing Journal Entries Necessary to record this exchange assuming that the exchange a has Commercial Substance Event General Journal Debit Credit a Exchange has commercial substance Depreciation Expense 854 See Answer

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List price of new meter		$19,276
Cash paid		12,200
Cost of old meter (5-year life, $854 salvage value)		13,664
Accumulated Depreciation-old meter (straight-line)		7,686
Secondhand fair value of old meter		6,344