1.Bonita Corporation, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first day of work, the accountant was assigned to total a batch of invoices with the use of an adding machine. Before long, the accountant, who had never before seen such a machine, managed to break the machine. Bonita Corporation gave the machine plus $401to Windsor Business Machine Company (dealer) in exchange for a new machine. Assume the following information about the machines.

Bonita Corp. Windsor Co.

(Old Machine) (New Machine)

Machine cost $342 $319

Accumulated depreciation 165 -0-

Fair value 101 502

For each company, prepare the necessary journal entry to record the exchange. (The exchange has commercial substance.)(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

2.Blue Company exchanged equipment used in its manufacturing operations plus $3,600in cash for similar equipment used in the operations of Kingbird Company. The following information pertains to the exchange.

Blue Co. Kingbird Co.

Equipment (cost) $33,600 $33,600

Accumulated depreciation 22,800 12,000

Fair value of equipment 15,000 18,600

Cash given up 3,600

Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance.(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange has commercial substance.(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)