On July 2, 2021, True Rock Corporation exchanged automotive equipment that was purchased on January 2, 2020 for a machine. Information pertaining to this transaction follows: Cost of the automotive equipment given up $311,237 Estimated useful life of the automotive equipment given up 8 Residual value of the automotive equipment given up $2,475 Fair value of the machine received in the exchange $294,498 Fair value of the automotive equipment given up $279,773 Cash given up in the exchange by True Rock Corporation $1,749 True Rock depreciated the automotive equipment using the straight-line method. 

Required: 1. Prepare True Rock Corporation's journal entry to account for the exchange, assuming that the transaction lacks commercial substrance. 

2. Prepare True Rock Corporation's journal entry to account for the exchange, assuming that the transaction has commercial substrance

Answer rating: 100% (QA)

1 Journal entry to account for the exchange without commercial substance Date July 2 2021 Automotive ... View the full answer