Practice Exercise 10-04 Your answer is partially correct. Try again. Tamarisk Inc. purchased a commercial grade soft-serve ice cream machine on September 30, 2017. Tamarisk traded in its existing machine and paid cash in the transaction. The details of the transaction are as follows: List price of new freezer Cash paid Cost of old machine (4-year life, $1,710 salvage value) Accumulated depreciation-old machine (straight-line) . Secondhand fair value of old machine $23,655 15,732 19,950 9,120 7,638 Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. Tamarisk's fiscal year ends on December 31, and Tamarisk recorded depreciation on the old machine through September 30, 2017. (Credit account titles are automatically indented when amount entered. Do not indent manually.) Debit Credit No. Account Titles and Explanation (a) Exchange has commercial substance: Machinery 7638 X 9120 Accumulated Depreciation (To record current depreciation) x Loss on Disposal of Machin X 18924 Machinery 19950 Cash 157321 X xH X 26562 (To record exchange of the machine) (b) Exchange lacks commercial substance: X x Machinery TAccumulated Depreciation (To record current depreciation) X 9120 X Machinery 19950 X x X Cash 15732 X X X x x X X X (To record exchange of the machine)