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B.T. Corp, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first day off work, the accountant was assigned to total a batch of invoices with the use of an adding machine. Before long, the accountant, who had never before seen such a machine, managed to break the machine. B.T. Corp gave the machine plus $340 to Dick Tracy Business Company (dealer) in exchange for a new machine. Assume the following information about the machines.
B.T. Corp Dick Tracey Co
(old machine) (new machine)
Machine cost $290 $270
Accumulated depreciation 140 -0-
Face value 85 425
Instructions:
For each company, prepare the necessary journal entry to record the exchange. (The exchange has commercial substance.)