A machine cost $240,000, has annual depreciation expense of $48,000, and has accumulated depreciation of $120,000 on December 31, 2016. On April 1, 2017, when the machine has a fair value of $96,000, it is exchanged for a similar machine with a fair value of $288,000 and the proper amount of cash is paid. The exchange lacked commercial substance.

(1) Prepare a journal entry to recognize the depreciation expense on April, 2017.

(2) Prepare a journal entry to record the exchange of the machines on April 1, 2017.