Question: Layne Co . has a machine that cost $ 2 5 5 , 0 0 0 . This old machine had an estimated life of

Layne Co. has a machine that cost $255,000. This old machine had an estimated life of ten years and a salvage value of $15,000. On December 1,2015, the old machine is exchanged for a new machine with a fair value of $142,000. The exchange lacked commercial substance. Layne also paid $18,000 cash. Assume that the straight-line. depreciation is used.Instructions(a) Show the calculation of the amount of gain or loss to be recognized by Layne Co. from the exchange.(b) Prepare all entries that are necessary on December 1,2015.

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