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A company intends to purchase a motor vehicle with a list price of $24,400. The dealer offers a part exchange allowance and the balance of $15,000 is to be paid in cash. The old motor vehicle to be used in part exchange originally cost 20,600 USD and has accumulated depreciation to date of $12000.
How would the part exchange allowance be recorded by the company ?
DR Motor Vehicle $9400 CR Disposals $9400
DR Cash $15000 CR Disposals $15000
DR Disposals $15000 CR Cash $ 15000
DR Cash $9400 CR Disposals $9400Please Solve this question I am very much confused Sir.
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