Holyfield Corporation wishes to exchange a machine used in its operations. Holyfield has received the following offers from other companies in the industry.
1. Dorsett Company offered to exchange a similar machine plus $23,000. (The exchange has commercial substance for both parties.)
2. Winston Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.)
3. Liston Company offered to exchange a similar machine, but wanted $3,000 in addition to Holyfield's machine. (The exchange has commercial substance for both parties.)
In addition, Holyfield contacted Greeley Corporation, a dealer in machines. To obtain a new machine, Holyfield must pay $93,000 in addition to trading in its old machine.
Holyfield Dorsett Winston Liston Greeley
Machine cost 160000 120,000 152000 160000 130000
Accum. Depr 60,000 45,000 71000 75000 0
Fair Value 92000 69000 92000 95000 185000
For each of the four independent situations, prepare the journal entries to record the exchange on the books of each company.