3. King Corp. traded an old machine with book value of $60,000 (original cost $110,000) and a fair value of $90,000. King received a machine with a fair value of $80,000 plus cash of $10,000.

1) Prepare the journal entry to record the exchange. Assume the exchange has commercial substance.

2) Prepare the journal entry to record the exchange assuming that the exchange has no commercial substance.