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John's uncle donated a truck to his company, John's Corporation. The truck had an original cost of $95,000, a book value of $40,000, and a fair value of $60,000. The journal entry by John's Corporation to record this donated asset will include a:

a. debit Truck for $95,000 and credit Gain for $35,000.
b. debit Truck for $60,000 and credit Gain for $20,000.
c. debit Truck for $60,000 and credit Gain for $60,000.
d. debit Truck for $95,000 and credit Gain for $95,000.

Answer :

Abiolataiwo2015go

Based on the information given the appropriate journal entry  by John's Corporation to record this donated asset will include a: c. debit Truck for $60,000 and credit Gain for $60,000.

Since the truck donated to his corporation has a fair value of the amount of $60,000 which is the worth of the truck (assets) which means that the appropriate journal entry to record the transaction will be:

Debit Truck  $60,000

Credit Gain $60,000

(To record asset donated)

Inconclusion the journal entry  by John's Corporation to record this donated asset will include a: c. debit Truck for $60,000 and credit Gain for $60,000.

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