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9:26 Homework 7.pdf he Exercise 1 Pizza Company trades its used delivery cars for a...

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Accounting

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9:26 Homework 7.pdf he Exercise 1 Pizza Company trades its used delivery cars for a new models at Hudson Toyota. The used cars have a book value of $60,000 (original cost $140,000 less $80,000 accumulated depreciation). The new cars have MSRP of $80,000. The fair value of the old cars based on estimation by third party is $50,000. After some negotiations between the Pizza Company and Hudson Toyota, the new cards would receive $10,000 discount and the trade in value of the old trucks in the amount of $55,000. The remaining portions is to be paid in cash. Prepare the journal entries assuming a) commercial substance and b) no commercial substance

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