Question: Buck Machine Company has outstanding a $150,000 note payable to Ontario Investment Corporation. Because of financial difficulties, Buck negotiates with Ontario to exchange inventory of

Buck Machine Company has outstanding a $150,000 note payable to Ontario Investment Corporation. Because of financial difficulties, Buck negotiates with Ontario to exchange inventory of machine parts to satisfy the debt. The cost of the inventory transferred is carried on Buck’s books at $90,000. The estimated retail value of the inventory is $140,000. Buck uses a perpetual inventory system. Prepare journal entries for the exchange on the books of Buck Machine Company according to the requirements of FASB Statement No.15.

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