Question

Journal entry for exchange of old asset having book value rs 10000 for rs 7000 and purchase new asset of rs 25000 difference being paid in cash rs 18000

Answer 1

Answer:

New Asset Ac... Dr 25, 000

Profit and loss AC.. Dr 3,000

To old asset AC 10,000

To cash AC 18,000

Explanation:

Old asset value = 10,000 sold for 7,000

Loss = 3000 hence profit and loss AC is debited