Question 13 of 13

Question 13 of 13 3.5/7 Tamarisk Company exchanged equipment used in its manufacturing operations plus $4,320 in cash for similar equipment used in the operations of Vaughn Company. The following information pertains to the exchange. Equipment (cost) Accumu lated depreciation Fair value of equipment Cash given up Your answer is correct. Tamarisk Co. $40,320 27,360 18,000 4,320 Vaughn Co. $40,320 14,400 22,320 Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. (Credit account titles are automatically indented when amount is entered. DO not indent nunually. If no entry is select "NO Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Tamarisk Company: Accumulated Depreciation-Equipment Equipment Equipment Cash Vaughn Company: Equipment Accumulated Depreciation-Equipment Cash Debit 27360 17280 18000 14400 4320 Credit 40320 4320