On 3 January 2019, Greskowiak Ltd exchanged a machine with a cost of $430 000 and accumulated depreciation of $150 000 for a new similar machine with a cash price of $460 000. Ignore GST.

Required

(a) Prepare general journal entries to record the exchange of the machines, assuming a trade‐in allowance of $280 000 was received for the old machine and $180 000 was paid in cash.

(b) Prepare general journal entries to record the exchange of machines, assuming a trade‐in allowance of $250 000 for the old machine and $210 000 was paid in cash.