The $60,000 Original Cost of a Machine Is Recorded in an Account

Essay

The $60,000 original cost of a machine is recorded in an account called Old Machine.After $45,000 of depreciation was recorded,the machine was traded in on a new machine with a cash price of $85,000.A $10,500 trade-in allowance was received on the old machine and the balance was paid in cash.This transaction has commercial substance.Prepare the general journal entry to record the trade; the cost of the new machine should be debited to a New Machine account.