Exchanging assets------two situations

Community Bank recently traded in office fixtures. Here are the facts:

Old fixtures:	New fixtures:
Cost $96,000	Cash paid $103,000
Accumulated depreciation, $65,000	Market value, $134,000

Requirements

Record community banks trade-in of old fixtures for new ones. Assume the exchange had commercial substance.

Now lets change one fact. Community Bank feels compelled to do business with Mountain Furniture, a bank customer, even though the bank can get the fixtures elsewhere at a better price. Community Bank is aware that the new fixtures market value is only $127,000. Record the trade-in. Assume the exchange had commercial substance.