Equipment that cost $416,500 and has accumulated depreciation of $315,100 is exchanged for equipment with a fair value of $200,000 and $40,000 cash is received. The exchange lacked commercial substance.

Calculate the gain to be recognized from the exchange.

Gain recognized

$

Prepare the entry for the exchange. Show a check of the amount recorded for the new equipment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit