Colaw Company exchanges equipment with Eaton Company and Mantle Company exchanges equipment with Fiero Company. The following information pertains to the exchanges:

Colaw Company Mantle Company

Equipment (cost) 57,000 48,000

Accumulated depreciation 25,000 22,500

Fair value of the equipment 37,500 21,000

Cash paid 12,500 5,000

Instructions

Prepare the journal entries to record the exchanges on the books of Colaw Company and Mantle Company. The transaction has commercial substance.