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Ali Inc. and Clovers Co. have an exchange with commercial substance. The asset given up by Ali Inc. has a book value of $67000 and
Ali Inc. and Clovers Co. have an exchange with commercial substance. The asset given up by Ali Inc. has a book value of $67000 and a fair value of $86000. The asset was given up by Clovers. Co. has a book value of $131000 and a fair value of $125000. A boot of $39000 is received by Clover's Co.
Clover's journal entry to record the exchange will include
a debit to Cash for $39000.
a credit to Equipment for $131000.
a debit to loss on Disposal of $1696.
a credit to gain on disposal for $1696.
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