Car parts manufacturer Lindt Corporation exchanges equipmenthaving a carrying amount of $15,000 ( original cost $60,000) with a textile manufacturer, Sheep Corporation.The equipment that Lindt receives in exchange from Sheep has a carrying value on Sheep'sbooks of $25,000(original cost $90,000).The objectively determined fair value of both pieces of equipment is $21,000.Both companies are 100% owned by the same individual and report under ASPE.Sheep has a contributed surplus balance resulting from related party transactions in the amount of $12,000.

Required:

Prepare the journal entry on the books of Sheep Corporation and support your answer with reasons for this treatment.