1) A machine cost $80,000, has annual depreciation expense of $16,000, and has accumulated depreciation of $40,000 on December 31,2010. On April 1,2011, when the machine has a fair value of $32,000, it is exchanged for a similar machine with a fair value of $96,000 and the proper amount of cash is paid. The exchange lacked commercial substance.

2) Equipment that cost $80,000 and has accumulated depreciation of $63,000 is exchanged for equipment with a fair value of $32,000 and $8,000 cash is received. The exchange lacked commercial substance.

Required:

Prepare all entries that are necessary for the above transac