Question

journal entry for exchange of old asset having book value Rs 10000 for Rs 7000 and purchase a new asset for Rs 25000 difference paid in cash Rs 18000

Answer 1

journal entries

Step by step Explanation :

journal entries for exchange of an old asset to new asset

New asset account Dr. 25,000

loss on sale of old asset Dr. 3,000

• To sale of old asset acount. 10000
• To cash account. 18000

(Being old asset sold for 10,000 with the loss of 3000 and a new assets purchased for 25000 in exchange of the old asset, and 18000 paid in cash)

working notes :

book value of old asset = 10000

less the value it has been sold for = 7,000

the loss on selling the old asset = 3000

$10000 - 7000 = 3000$