Question: During the current year, TIK Drilling trades an old derrick that has a book value of $300,000 (original cost $600,000 less accumulated depreciation $300,000) for

During the current year, TIK Drilling trades an old derrick that has a book value of $300,000 (original cost $600,000 less accumulated depreciation $300,000) for a new derrick from Mate Heavy Equipment Co. The new derrick cost Mate $500,000 to manufacture and is classified as inventory. The following information is also available. a. Assuming that this exchange is considered to have commercial substance, prepare the journal entries on the books of (1) TIK Drilling and (2) Mate Heavy Equipment. b. Assuming that this exchange lacks commercial substance for TIK, prepare the journal entries on the books of TIK Drilling

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