A company purchased store equipment for $4,300 by trading in old equipment with a cost of $2,000 and that had accumulated depreciation of $1,900 as of the exchange date. The company received a $75 trade-in allowance for the old equipment with the balance of $4,225 paid in cash. Prepare the journal entry to record the exchange, assuming the transaction had commercial substance.
What will be an ideal response?
| Store Equipment (new) | 4,300 | ? | ? |
| Accumulated Depreciation - Store Equip. (old) | 1,900 | ? | ? |
| Loss on Exchange of Equipment | 25 | ? | ? |
| Store Equipment (old) | ? | 2,000 | ? |
| Cash | ? | 4,225 | ? |
| Market value of new equipment | ? | $4,300 | ? |
| Book value of old equipment ($2,000 ? 1,900) | $100 | ? | ? |
| Cash paid in the exchange | 4,225 | 4,325 ? | ? |
| Loss | ? | $25 | ? |
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