When a Company Exchanges Machinery and Receives a Trade-In Allowance

Multiple Choice

When a company exchanges machinery and receives a trade-in allowance less than the book value, this transaction would be recorded with the following entry:

A) debit Machinery and Accumulated Depreciation; credit Machinery and Cash
B) debit Cash and Machinery; credit Accumulated Depreciation
C) debit Cash and Machinery; credit Accumulated Depreciation and Machinery
D) debit Machinery, Accumulated Depreciation, and Loss on Disposal; credit Machinery and Cash