Susquehanna Corporation wishes to exchange a machine used in its operations. Susquehanna has received the following offers
Question:
Susquehanna Corporation wishes to exchange a machine used in its operations.
Susquehanna has received the following offers from other companies in the industry.
1. Choctaw Company offered to exchange a similar machine plus $23,000. (The exchange has commercial substance for both parties.)
2. Powhatan Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.)
3. Shawnee Company offered to exchange a similar machine, but wanted $8,000 in addition to Susquehanna's machine. (The exchange has commercial substance for both parties.)
4. In addition, Susquehanna contacted Seminole Corporation, a dealer in machines. To obtain a new machine, Susquehanna must pay $93,000 in addition to trading in its old machine.
Instructions
For each of the four independent situations, prepare the journal entries to record the exchange on the books of each company. (Round to nearestdollar.)
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Step by Step Answer:
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso