*This is a monetary exchange with a gain or loss
A machine cost $40,000 has annual amortization expense of $8,000 and has accumulated amortization of $20,000 on December 31 2006. On April 1 2007 when the machine has a fair value of $16,000 it is exchanged for a similar machine with a fair value of $44,000 and $28,000 cash is paid.
Instructions
Prepare all entries that are necessary at April 1 2007.