Question

An unsold machinery appearing in the books at 5,000 is exchanged for a new machinery of
5,000 .The old machinery has been valued at 800 for exchange purpose. I need the journal entry for this.

Answer 1

Explanation:

New Machinery A/C. Dr. Rs.1,20,000

To Old machinery A/C. Rs 40,000

To Cash A/C. Rs. 80,000

(Being new machinery bought by exchanging old machinery)

On loss of exchange of old machinery :

Loss on Exchange A/C. Dr. Rs.10,000

To Old Machine A/C. Rs.10,000

(Being old machine exchanged on loss

❤️❤️❤️❤️❤️❤️❤️❤️❤️

Answer 2

This answer is correct ☝☝☝