Question - Concord Company exchanged equipment used in its manufacturing operations plus $3,060 in cash for similar equipment used in the operations of Marigold Company. The following information pertains to the exchange.
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Concord Co.
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Marigold Co.
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Equipment (cost)
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$28,560
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$28,560
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Accumulated depreciation
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19,380
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10,200
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Fair value of equipment
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12,750
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15,810
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Cash given up
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3,060
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Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance.
Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange has commercial substance.