course name is Financial Accounting, explain in detail your answer, no pictures or hand writing

Q2. ABC Company exchanged equipment used in its manufacturing operations plus $4,500 in cash for similar equipment used in the operations of XYZ Company. The following information pertains to the exchange: (2 Marks)

	ABC	XYZ
Equipment (cost)	$63,000	$63,000
Accumulated Depreciation	42,750	22,500
Fair value of equipment	30,375	34,875
Cash given up	4,500

Required:

i. Calculate gain or loss on exchange.

ii. Prepare the journal entries to record the exchange on the books of both companies when:

1. ABC has commercial substance
2. ABC lacks commercial substance
3. XYZ has commercial substance
4. XYZ lacks commercial substance