Blue Company purchased an electric press on June 30, 2025, by trading in its old gas...

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Blue Company purchased an electric press on June 30, 2025, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase: List price of new press $25,300 Cash paid 10,900 Cost of old press (10-year life, $900 residual value) 34,500 Accumulated depreciation-old press (straight-line) 27,000 Second-hand market value of old press 6,600 Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. Blue's fiscal year ends on December 31, and depreciation has been recorded through December 31, 2024. (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. List all debit entries before credit entries.) No. Account Titles and Explanation (a) Exchange has commercial substance: Depreciation Expense Accumulated Depreciation-Equipment (To record current depreciation.) Equipment Accumulated Depreciation-Equipment Cash Equipment Gain on Disposal of Equipment (To record exchange of the equipment.) Debit 1680 25300 Credit 1t 109 345 (b) Exchange lacks commercial substance: (To record current depreciation.) (To record exchange of the equipment.) Blue Company purchased an electric press on June 30, 2025, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase: List price of new press $25,300 Cash paid 10,900 Cost of old press (10-year life, $900 residual value) 34,500 Accumulated depreciation-old press (straight-line) 27,000 Second-hand market value of old press 6,600 Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. Blue's fiscal year ends on December 31, and depreciation has been recorded through December 31, 2024. (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. List all debit entries before credit entries.) No. Account Titles and Explanation (a) Exchange has commercial substance: Depreciation Expense Accumulated Depreciation-Equipment (To record current depreciation.) Equipment Accumulated Depreciation-Equipment Cash Equipment Gain on Disposal of Equipment (To record exchange of the equipment.) Debit 1680 25300 Credit 1t 109 345 (b) Exchange lacks commercial substance: (To record current depreciation.) (To record exchange of the equipment.)