Question

In: Accounting

Q2 Mathews Company exchanged equipment used in its manufacturing operations plus $9,800 in cash for similar...

Q2 Mathews Company exchanged equipment used in its manufacturing operations
plus $9,800 in cash for similar equipment used in the
operations of Biggio Company. The following information pertains to the exchange.
Mathews Co. Biggio Co.
Equipment (cost) $153,000 $146,000
Accumulated depreciation $32,000 $19,000
Fair value of equipment $122,200 $132,000
Cash given up $9,800
Instructions
(a) Prepare the journal entries to record the exchange on the books of both companies.
Assume that the exchange lacks commercial substance.
Mathewes
Book Value Fair Value Gain (Loss)
Baiggio
Book Value Fair Value Gain (Loss)
(b) Prepare the journal entries to record the exchange on the books of both companies.
Assume that the exchange has commercial substance.
Book Value Fair Value Gain (Loss)
Baiggio
Book Value Fair Value Gain (Loss)

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