Jan. 1 Traded in old office equipment with book value of $55,000 (cost of $129,000 and accumulated depreciation of $74,000) for new equipment. Lora also paid $5,000 in cash. Fair value of new...

Journalizing partial-year depreciation and asset disposals and exchanges

During 2018, Lora Company completed the following transactions:

Record the transactions in the journal of Lora Company.

Extracted text: Jan. 1 Traded in old office equipment with book value of $55,000 (cost of $129,000 and accumulated depreciation of $74,000) for new equipment. Lora also paid $5,000 in cash. Fair value of new equipment is $116,000. Assume the exchange had commercial substance. Apr. 1 Sold equipment that cost $12,000 (accumulated depreciation of $1,000 through December 31 of the preceding year). Lora received $7,100 cash from the sale of the equipment. Depreciation is computed on a straight- line basis. The equipment has a five-year useful life and a residual value of $0. Dec. 31 Recorded depreciation as follows: Office equipment is depreciated using the double-declining-balance method over four years with a $7,000 residual value.