Exercise 10-19

Carlos Arruza Company exchanged equipment used in its manufacturing operations plus $5,178 in cash for similar equipment used in the operations of Tony LoBianco Company. The following information pertains to the exchange.

		Carlos Arruza Co.			Tony LoBianco Co.
Equipment (cost)		$48,328			$48,328
Accumulated depreciation		32,794			17,260
Fair value of equipment		21,575			26,753
Cash given up		5,178

Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. (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.)

Account Titles and Explanation Debit Credit

a. Carlos Arruza Company

Account Titles and Explanation Debit Credit

b. Tony Lo Bionca Company