Recording Asset Exchanges

Miley Corp. exchanges old equipment that costs $$28,000($accumulated depreciation of $$12,600)$ for new equipment. The fair value of the new equipment is $$22,400.$ The fair value of the old equipment cannot be reliably estimated.

Required

Prepare the entry to record acquisition of the new equipment under each of the following separate cases.

a$.$ Transaction has commercial substance. No cash is involved.

b$.$ Transaction has commercial substance. Cash of $$8,400$ is paid by Miley.

c$.$ Transaction lacks commercial substance. No cash is involved.

d$.$ Transaction lacks commercial substance. Cash of $$2,800$ is paid by Miley.

e$.$ Transaction lacks commercial substance. Cash of $$5,600$ is received by Miley.

Exchange has Commercial Substance

Exchange Lacks Commercial Substance

Prepare the entry to record acquisition of the new equipment under each of the following separate cases.

c$.$ Transaction lacks commercial substance. No cash is involved.

d$.$ Transaction lacks commercial substance. Cash of $$2,800$ is paid by Miley.

e$.$ Transaction lacks commercial substance. Cash of $$5,600$ is received by Miley.

Note: Round answers to the nearest whole dollar.