Exercise 10-18

Pronghorn Company purchased an electric wax meter on April 30, 2017, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase.

List price of new meter		$19,276
Cash paid		12,200
Cost of old meter (5-year life, $854 salvage value)		13,664
Accumulated Depreciation-old meter (straight-line)		7,686
Secondhand fair value of old meter		6,344

Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. Pronghorns fiscal year ends on December 31, and depreciation has been recorded through December 31, 2016. (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 0 for the amounts.)