Question

Cannondale Company purchased an electric wax melter on April 30, 2014, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase. List price of new melter $28,598 Cash paid 18,100 Cost of old melter (5-year life, $1,267 salvage value) 20,272 Accumulated Depreciation-old melter (straight-line) 11,403 Secondhand fair value of old melter 9,412 Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. Cannondale’s year ends on December 31, and depreciation has been recorded through December 31, 2013. (Credit account titles are automatically indented when amount is entered. Do not indent