Marigold Limited owns 90% of Sunland Inc. During 2020, Marigold acquired a machine from Sunland in...

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Marigold Limited owns 90% of Sunland Inc. During 2020, Marigold acquired a machine from Sunland in exchange for its own used machine. Both companies are in the tool-making business. The agreed exchange amount is $1,300, although the transaction is nonmonetary. Sunland has an original cost of $6,000 and carries its machine on its books at a carrying amount of $930, whereas Marigold has an original cost of $7,000 and carries its machine on its books at a carrying amount of $1.180. Neither company has a balance in the Contributed Surplus account relating to previous related-party transactions. Both Marigold and Sunland follow ASPE. Using the related-party decision tree and answer the following. Prepare the journal entries to record the exchange for both Marigold and Sunland under the assumption that the transaction is not in the normal course of operations for either company, and the transaction has commercial substance. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Marigold Limited owns 90% of Sunland Inc. During 2020, Marigold acquired a machine from Sunland in exchange for its own used machine. Both companies are in the tool-making business. The agreed exchange amount is $1,300, although the transaction is nonmonetary. Sunland has an original cost of $6,000 and carries its machine on its books at a carrying amount of $930, whereas Marigold has an original cost of $7,000 and carries its machine on its books at a carrying amount of $1.180. Neither company has a balance in the Contributed Surplus account relating to previous related-party transactions. Both Marigold and Sunland follow ASPE. Using the related-party decision tree and answer the following. Prepare the journal entries to record the exchange for both Marigold and Sunland under the assumption that the transaction is not in the normal course of operations for either company, and the transaction has commercial substance. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

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Journal entries for Marigold Limited Account Debit Credit Machine Sunland 1300 Accumulated Depreciat... View the full answer