Nonmonetary Exchanges Holyfield Corporation wishes to exchange a

Nonmonetary Exchanges 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   $160,000        $120,000         $152,000        $160,000         $130,000

Accumulated

depreciation        60,000             45,000             71,000             75,000                  –0–

Fair value             92,000             69,000             92,000             95,000           185,000

For each of the four independent situations, prepare the journal entries to record the exchange on the books of each company.

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