Carlos Arruza Company exchanged equipment used in its manufacturing operations plus $9,456 in cash for similar equipment used in the operations of Tony LoBianco Company. The following information pertains to the exchange.

Carlos Arruza Co. Tony LoBianco Co.

Equipment (cost) $88,256 $88,256

Accumulated depr. 59,888 31,520

Fair value of equip. 39,400 48,856

Cash given up 9,456

Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance