1. Sky Inc. gave up a piece of equipment and $18,000 and received a new piece of equipment. The old piece of equipment had a historical cost of $102,000, a book value of $82,000, and a fair value of $90,000.

Assume that the exchange had commercial substance.

Determine the amount of gain or loss that sky Inc. will record on this transaction.

What would be the book value that sky Inc. will record for the new piece of equipment?

What is the journal entry that sky Inc. should record for this transaction?

Now assume that this exchange has no commercial substance, what is the journal entry that sky Inc. should record for this transaction?