(Nonmonetary Exchange) Cannondale Company purchased an electric wax melter on April 30, 2020, by trading...
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Accounting
(Nonmonetary Exchange) Cannondale Company purchased an electric wax melter on April 30, 2020, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase.
| List price of new melter Cash paid Cost of old melter (5-year life, $700 salvage value) Accumulated depreciationold melter (straight-line) Secondhand fair value of old melter | $15,800 10,000 11,200 6,300 5,200 |
Instructions
Prepare the journal entry(ies) necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. Cannondales fiscal year ends on December 31, and depreciation has been recorded through December 31, 2019.
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