Journal entries for traded two business autos.
1.(3/28/2009) Goochland purchased on account $950,000 Merchandise Inventory to be held for resale. All purchases are recorded net of the 2% discount.
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2.(3/29/09 - Two entries required) Goochland Company traded two business autos ($60,000 cost, $31,000 accumulated depreciation at the beginning of 2009, $40,000 reliably estimated fair market value) and $24,000 cash for a substantially different delivery van less a sales price of $66,500. The transaction is presumed to have economic substance. (Note - the additional depreciation for three months in 2009 is $1,000; make this entry before recording the separate entry to record the exchange.)
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