On August 1, Bonita, Inc. exchanged productive assets with Windsor, Inc. Bonita’s asset is referred to below as “Asset A,” and Windsor’ is referred to as “Asset B.” The following facts pertain to these assets. Asset A Asset B Original cost $ 134,400 $ 154,000 Accumulated depreciation (to date of exchange) 56,000 65,800 Fair value at date of exchange 84,000 105,000
On August 1, Bonita, Inc. exchanged productive assets with Windsor, Inc. Bonita’s asset is referred to below as “Asset A,” and Windsor’ is referred to as “Asset B.” The following facts pertain to these assets. Asset A Asset B Original cost $ 134,400 $ 154,000 Accumulated depreciation (to date of exchange) 56,000 65,800 Fair value at date of exchange 84,000 105,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On August 1, Bonita, Inc. exchanged productive assets with Windsor, Inc. Bonita’s asset is referred to below as “Asset A,” and Windsor’ is referred to as “Asset B.” The following facts pertain to these assets.
|
Asset A
|
Asset B
|
|||
| Original cost | $ 134,400 | $ 154,000 | ||
| 56,000 | 65,800 | |||
| Fair value at date of exchange | 84,000 | 105,000 | ||
| Cash paid by Bonita, Inc. | 21,000 | |||
| Cash received by Windsor, Inc. | 21,000 |
Assuming that the exchange of Assets A and B has commercial substance, record the exchange for both Bonita, Inc. and Windsor, Inc. in accordance with generally accepted accounting principles. (Round answers to 0 decimal places, e.g. 5,275. 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.)
BONITA INC ENTRY:
WINDSOR INC ENTRY:
I answered this myself but got it wrong. Can someone help me? I tried to use ASSET A & B as possible account titles and it was marked wrong. and specifics were required for the kind of depreciation (truck, machinery, building, ect) I was condused by this because all the info says is commercial. would commercial mean a building? would it mean machinery? i have no clue.... any and all help in identifying the correct accounts for the journal entries would be appreciated.
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