CompanyCompany A exchanges machinery with a cost of 400.000 and accumulated depreciation of 315.000. The fair...

CompanyCompany A exchanges machinery with a cost of 400.000 and accumulated depreciation of 315.000. The fair value of the machine is 200.000 The machine is exchanged for a new machine having a fair value of 160.000 and cash of 400.000.

a) Prepare the journal entry needed, assuming the exchange has commercial substance.

b)Prepare the journal entry needed, assuming the exchange lacks commercial substance.

Expert Solution

ekkarill92 answered 1 year ago

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