Question

PLease help me answer this it's urgent . An old machine with the book value of 80000 is exchanged for a new machine of 240000. The old machine is valued at 50000 for exchange purpose by exchange tools Ltd. . Give the journal entry.

Answer 1

Explanation:

New Machine A/C. Dr. Rs.2,40,000

To old machine A/C. Rs.50,000

To Cash A/C or Bank A/C. Rs.1,90,000

(Being new machinery bought by exchanging old machinery )

Profit and Loss A/C. Dr. Rs.30,000

To Old machine A/C. Rs.30,000

(Being loss on exchange of old machine)

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Answer 2

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