Question

1. Prepare general journal entries for the transactions.

Mitchell Parts Co. had the following plant asset transactions during the year:
1. Assets discarded or sold:
Jan. 1 Motor #12, which had a cost of $2,890 and accumulated depreciation of
$2,890, was discarded.
8 Motor #8, which had a cost of $4,440 and accumulated depreciation of
$4,020, was sold for $260.
14 Motor #16, which had a cost of $5,730 and accumulated depreciation of
$5,490, was sold for $470.
2. Assets exchanged or traded in:
Feb. 1 Motor #6, which had a cost of $5,860 and accumulated depreciation of
$4,590, was traded in for a new motor (#22) with a fair market value of
$6,800. The old motor and $5,300 in cash were given for the new motor.
9 Motor #9, which had a cost of $5,420 and accumulated depreciation of
$4,940, was traded in for a new motor (#23) with a fair market value of
$6,450. The old motor and $6,170 in cash were given for the new motor.

Answer 1

1. Accumulated Depreciation (Dr.) $2,890

Motor #12 (Cr.) $2,890

2. Cash (Dr.) $260

Accumulated Depreciation (Dr.) $4,020

Loss on Sale (Dr.) $160

Motor #8 (Cr.) $4,440

3. Cash (Dr.) $470

Accumulated Depreciation (Dr.) $5,490

Gain on Sale (Cr.) $230

Motor #16 (Cr.) $5,730

Step-by-step explanation:

1. New Motor #22 (Dr.) $6,800

Accumulated Depreciation (Dr.) $4,590

Gain on Sale (Cr.) $230

Motor #6 (Cr.) $5,860

Cash (Cr.) $5,300

2. New Motor #23 (Dr.) $6,450

Accumulated Depreciation (Dr.) $4,940

Loss on Sale (Dr.) $200

Motor #9 (Cr.) $5,420

Cash (Cr.) $6,170