purchase of an asset on exchange to another asset

This query is : Resolved

S. Anand (Querist)
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28 April 2011 Dear Sir,
During the financial year, we have purchase an asset. We availed an offer to exchange an old asset in our books for the new one purchased.
New asset = Rs.50,000/-

Less: Offer for
exchange of old
asset = Rs.10,000/-
===========
AMOUNT PAID = Rs.40,000/-
===========

The book value of old asset (referred above) is
Original cost = Rs.3,000/-
Less: Dep Reserve = Rs.2,999/-
----------
WDV = Rs. 1/-
==========

Please advise the journal entry to be passed on the above.
Regards
S. Anand

Mandar

Mandar (Expert)
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28 April 2011 Vendor A/c Dr 10000
To Asset A/c 1
To Profit on sale of asset A/c 9999
Being sale of old asset)

F Asset A/c Dr 50000
To Vendor Account 50000
Being Purchase of new asset

Vendor A/c Dr 40000
To Bank Account 40000
Being payment to vendor

S. Anand

S. Anand (Querist)
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28 April 2011 Thank you very much

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