Current Attempt in Progress

Sunland Co$.$ had a sheet metal cutter that cost $$117,000$ on January $5,2021.$ This old cutter had an estimated life of ten years and a salvage value of $$19,000.$ On April $3,2026,$ the old cutter is exchanged for a new cutter with a fair value of $$60,000.$ The exchange lacked commercial substance. Sunland also received $$15,000$ cash. Assume that the last fiscal period ended on December $31,2025,$ and that straight$-$line depreciation is used.

$($a$)$

Calculate the gain or loss to be recognized by Sunland Co$.$

$$ recognized $ $$Question $27$ of $28$

$/8$

$($b$)$

Prepare all entries that are necessary on April $3,2026.($Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.$)$

Account Titles and Explanation

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Debit

Credit

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$($To record depreciation.$)$

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$$

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$$

$$

$$

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$$

$$

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$($To record exchange of machineries.$)$

List of Accounts

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