1) Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance.

2) Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange has commercial substance

Exercise 10-19 Vaughn Company exchanged equipment used in its manufacturing operations plus $4,380 in cash for similar equipment used in the operations of Bramble Company. The following information pertains to the exchange. Vaughn Co. Bramble Co. $40,880 Equipment (cost) $40,880 Accumulated depreciation 27,740 14,600 22,630 18,250 Fair value of equipment Cash given up 4,380