Question: Book & Co. has a machine that cost $15,000,000 on January 1, 2013. This old machine had an estimated life of ten years with no

Book & Co. has a machine that cost $15,000,000 on January 1, 2013. This old machine had an estimated life of ten years with no salvage value, accumulated depreciation of $7,500,000 and has current fair value of $6,000,000. On December 31, 2017, Book exchanges the old machine plus $200,000 for a machine owned by Tomas with a fair value of $6,200,000. Tomas Inc. had purchased the machine for $14,800,000 and it has a accumulated depreciation of $7,800,000

Prepare the journal entries for Book & Co. to record the exchange:

1. Assuming that the transaction had commercial substance

2. Assuming that the transaction lacked commercial substance

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