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Which one should be recognized, actual cost or fair market value?
April 23, 2009 on 6:59 am | By advertising | In marketing |If I was asked to write an journal entry for 'a second-hand equipment was given to the owner of Smith Corp by a friend costing $50,000 with a fair market value of $25,000 was inverted in her clinic', which one should I use in debiting equipments and crediting capital, the 50,000 or the 25,000? Why? Please help! Thanks! 
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Definately the fair market value. Just because something paid so much for it, or it cost a certain amount, it's only worth what someone will pay for it (anything) or what a given item is going for at that time.
Comment by larz — April 23, 2009 #