Fred and Ginger exchanged productive assets in a transaction that lacks commercial substance. The following facts pertain to these assets.

		Fred		Ginger
Fair value at date of exchange		$97,500		$ 78,000
Original cost		124,000		130,000
Accumulated depreciation (to date of exchange)		50,000		61,100
Cash exchanged		19,500		19,500

1. What is the amount of gain or loss (1) realized and (2) recognized for each company?
2. Prepare the journal entry to record the exchange for each company