Wildhorse Company exchanged equipment used in its manufacturing operations plus $3,240 in cash for similar equipment used
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Question:
Wildhorse Company exchanged equipment used in its manufacturing operations plus $3,240 in cash for similar equipment used in the operations of Sheffield Company. The following information pertains to the exchange.Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance.
| Wildhorse Co. | Sheffield Co. | |||||
|---|---|---|---|---|---|---|
| Equipment (cost) | $30,240 | $30,240 | ||||
| Accumulated depreciation | 20,520 | 10,800 | ||||
| Fair value of equipment | 13,500 | 16,740 | ||||
| Cash given up | 3,240 | |||||
Expert Answer:
To record the exchange of equipment on the books of both companies we need to consider the fair valu... View the full answer
Related Book For 
Intermediate Accounting
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield
Posted Date:
