Grand Co. trades in an old machine for a new machine. The new machine has a list price of $10,000. The old machine has a cost of $12,000

A patent was purchased for $20,000 and expected to be used for the 20-year life with no salvage
value. The entry to expense the patent during the· second year of life will include which of the
following entries? (Check all that apply.)

Credit to Accumulated Amortization $1,000.
Debit to Amortization Expense $1,000.
Debit to Accumulated Amortization $1,000.
Credit to Amortization Expense $1,000.


Zion Co. paid cash for an upgrade to an existing machine that would reduce the amount of waste
produced by the machine (and therefore, Increasing efficiency). The journal entry to record this
upgrade would Include which of the following entries? (Check all that apply.)

Debit to Machinery
Debit to Repair & Maintenance Expense
Credit to Repair & Maintenance Expense
Credit to Machinery
Credit to Cash
Debit to Cash


Grand Co. trades in an old machine for a new machine. The new machine has a list price of $10,000. The
old machine has a cost of $12,000 and accumulated depreciation of $9,000. In addition, Grand will pay
$6,000 towards the purchase. Because the new machine is much more technologically advanced, the
exchange has commercial substance. The trade will include a (gain/loss) gain of $1000.