Bridgeport Limited owns 90% of Ivanhoe Inc. During 2020, Bridgeport acquired a machine from Ivanhoe in exchange for its own used machine. Both companies are in the tool-making business. The agreed exchange amount is $1,250, although the transaction is nonmonetary. Ivanhoe has an original cost of $6,000 and carries its machine on its books at a carrying amount of $900, whereas Bridgeport has an original cost of $7,000 and carries its machine on its books at a carrying amount of $1,040. Neither company has a balance in the Contributed Surplus account relating to previous related-party transactions. Both Bridgeport and Ivanhoe follow ASPE. Using the related-party decision tree and answer the following. Your answer is partially correct. Prepare the journal entries to record the exchange for both Bridgeport and Ivanhoe under the assumption that the transaction is not in the normal course of operations for either company, and the transaction has commercial substance. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Bridgeport Limited: Account Titles and Explanation Debit Credit Machinerv (old) 1250 Machinery (new) 1040 Retained Earnings 210 Ivanhoe Inc.: 000 : MON 100 T: 10 Account Titles and Explanation Debit Credit Machinery (new) 1250 Machinery (old) 900 Retained Earnings 350 Prepare the journal entries to record the exchange for both Bridgeport and Ivanhoe under the assumption that the transaction is not in the normal course of operations for either company, and the transaction does not have commercial substance. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Bridgeport Limited: Account Titles and Explanation Debit Credit Machinerv (old) 900 Retained Earnings 140 Accumulated Depreciation-Machinery 1040 Ivanhoe Inc.: Account Titles and Explanation Debit Credit Machinery (new) 1040 Accumulated Depreciation-Machinery 900 Retained Earnings 140 Prepare the journal entries to record the exchange for both Bridgeport and Ivanhoe under the assumption that the transaction is in the normal course of operations for each company, and the transaction has commercial substance. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Bridgeport Limited: Account Titles and Explanation Debit Credit Machinery (old) 900 Retained Earnings 140 Loss on Disposal of Machinery 1040 Ivanhoe Inc.: Account Titles and Explanation Debit Credit Machinery (old) 1040 Accumulated Depreciation-Machinery 900 Retained Earnings 140 Prepare the journal entries to record the exchange for both Bridgeport and Ivanhoe under the assumption that the transaction is in the normal course of operations for each company, and the transaction does not have commercial substance. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Bridgeport Limited: Account Titles and Explanation Debit Credit Machinery (new) 900 Retained Earnings 140 1040 IN Ivanhoe Inc.: Account Titles and Explanation Debit Credit Machinery (new) 1040 Machinery (old) 900 Retained Earnings 140
