Esteban Co. owns a machine that costs $38,400 with accumulated depreciation of $20,400. Esteban exchanges the machine

Question:

Esteban Co. owns a machine that costs $38,400 with accumulated depreciation of $20,400. Esteban exchanges the machine for a newer model that has a market value of $48,000.
(1) Record the exchange assuming Esteban paid $32,000 cash and the exchange has commercial substance.
(2) Record the exchange assuming Esteban pays $24,000 cash and the exchange lacks commercial substance.