a company trades an old web server for a new one the cost of the old server is 30 00 647859

1. On January 6, 2011, a company pays $120,000 for a patent with a remaining 17 year legal life to produce a toy expected to be marketable for three years. Prepare entries to record its acquisition and the December 31, 2011, amortization entry.

2. A company trades an old Web server for a new one. The cost of the old server is $30,000, and its accumulated depreciation at the time of the trade is $23,400. The new server has a cash price of $45,000. Prepare entries to record the trade under two different assumptions where the company receives a trade in allowance of (a) $3,000 and the exchange has commercial substance, and (b) $7,000 and the exchange lacks commercial substance.