During the current year, Monty Drilling trades an old derrick that has a book value of $307,200 (original cost $768,000 less accumulated depreciation $460,800) for a new derrick from Flounder Heavy Equipment Co. The new derrick cost Flounder $665,600 to manufacture and is classified as inventory. The following information is also available. Monty Drilling $268,800 Flounder Heavy Equip. Co. $998,400 Fair value of old derrick Fair value of new derrick Cash paid Cash received 729,600 729,600 Assuming that this exchange is considered to have commercial substance, prepare the journal entries on the books of (1) Monty Drilling and (2) Flounder Heavy Equipment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Debit Credit No. Account Titles and Explanation 1. Monty Drilling Equipment Accumulated Depreciation-Equipment Loss on Disposal of Equipment Equipment Cash 2. Flounder Heavy Equipment (To record exchange of inventory) (To record cost of inventory)