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For each of the four independent situations, prepare the journal entries to record the exchange on the books of each company. Metlock Corporation wishes to

For each of the four independent situations, prepare the journal entries to record the exchange on the books of each company.

Metlock Corporation wishes to exchange a machine used in its operations. Metlock has received the following offers from other companies in the industry.

1. Bonita Company offered to exchange a similar machine plus $26,220. (The exchange has commercial substance for both parties.)
2. Windsor Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.)
3. Sheridan Company offered to exchange a similar machine, but wanted $3,420 in addition to Metlocks machine. (The exchange has commercial substance for both parties.)

In addition, Metlock contacted Skysong Corporation, a dealer in machines. To obtain a new machine, Metlock must pay $106,020 in addition to trading in its old machine.

Metlock

Bonita

Windsor

Sheridan

Skysong

Machine cost $182,400 $136,800 $173,280 $182,400 $148,200
Accumulated depreciation 68,400 51,300 80,940 85,500 0
Fair value 104,880 78,660 104,880 108,300 210,900

For each of the four independent situations, prepare the journal entries to record the exchange on the books of each company. (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.)

No.

Account Titles and Explanation

Debit

Credit

1.

Metlock Corporation

Bonita Company

2.

Metlock Corporation

Windsor Company

3.

Metlock Corporation

Sheridan Company

4.

Metlock Corporation

Skysong Company

(To record exchange of inventory)
(To record cost of inventory)

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