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Exercise 10-20 (Part Level Submission) Crane Inc. has negotiated the purchase of a new piece of...

Exercise 10-20 (Part Level Submission) Crane Inc. has negotiated the purchase of a new piece of automatic equipment at a price of $10,560 plus trade-in, f.o.b. factory. Crane Inc. paid $10,560 cash and traded in used equipment. The used equipment had originally cost $81,840; it had a book value of $55,440 and a secondhand fair value of $63,096, as indicated by recent transactions involving similar equipment. Freight and installation charges for the new equipment required a cash payment of $1,452. Collapse question part (a) Prepare the general journal entry to record this transaction, assuming that the exchange has commercial substance. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit

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The following journal entry will be prepared to record the given transaction assuming the exchange has commercial substance:

Account Titles and Explanation Debit Credit
New Equipment ($10,560 + $63,096 + $1,452) 75,108
Accumulated Depreciation - Old Equipment ($81,840 - $55,440) $26,400
             Gain on Disposal of Equipment 7,656
             Old Equipment 81,840
             Cash ($10,560 + $1,452) 12,012
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