E$10\mathrm{.}20($LO $3)($Nonmonetary Exchange$)$ Ashbrook Inc. has negotiated the purchase of a new piece of automatic equipment at a price of $$8,000$ plus trade$-$in$,$ f$.$o$.$b$.$ factory. Ashbrook Inc. paid $$8,000$ cash and traded in used equipment. The used equipment had originally cost $$62,000$; it had a book value of $$42,000$ and a secondhand fair value of $$47,800,$ as indicated by recent transactions involving similar equipment. Freight and installation charges for the new equipment required a cash payment of $$1,100.$

Instructions

a$.$ Prepare the general journal entry to record this transaction, assuming that the exchange has commercial substance.

b$.$ Assuming the same facts as in $($a$)$ except that fair value information for the assets exchanged is not determinable, prepare the general journal entry to record this transaction.