Susquehanna Corporation wishes to exchange a machine used in its operations. Susquehanna has received the following offers
Question:
Susquehanna Corporation wishes to exchange a machine used in its operations.
Susquehanna has received the following offers from other companies in the industry.
1. Choctaw Company offered to exchange a similar machine plus $23,000. (The exchange has commercial substance for both parties.)
2. Powhatan Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.)
3. Shawnee Company offered to exchange a similar machine, but wanted $8,000 in addition to Susquehanna's machine. (The exchange has commercial substance for both parties.)
4. In addition, Susquehanna contacted Seminole Corporation, a dealer in machines. To obtain a new machine, Susquehanna must pay $93,000 in addition to trading in its old machine.
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Instructions
For each of the four independent situations, prepare the journal entries to record the exchange on the books of each company. (Round to nearestdollar.)
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Step by Step Answer:
1 Susquehanna Corporation Cash 23000 Machinery 69000 Accumulated Depreciation 50000 Loss on Exchange ...View the full answer
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso
