E10.20 (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 com- mercial 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. B E Debit Credit Account Titles (al Exchange has commercial substance 21 2 3 2 3 4 + 5 6 7 6 7 8 9 10 Supporting computations: 10 11 11 12 13 14 12 13 14 15 16 17 18 19 20 21 22 23(b) Fair value of assets not determinable 24 Account Titles 25 26 27 28 29 30 31 Supporting computations: Debit Credit 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32