II. Prepare journal entries for the following transactions: *Do not use of an account name of Book Value.

1) Jen Company trades its used machine for a new model at Metro Solutions Inc. The used machine has a book value of $8,000 (original cost of $12,000) and a fair value of $6,000. The new model lists for $16,000. Metro gives Jen a trade-in allowance of $10,000 for the used machine. Prepare a journal entry for Jen, assuming NO commercial substance.

2) Interstate Inc. exchanged a truck plus cash for another truck. The used truck has a book value of $42,000 (cost $64,000). The used truck has a fair market value of $49,000. Interstate paid $17,000 cash to complete this transaction.

A) Prepare a journal entry for Interstate, assuming commercial substance.

B) Prepare a journal entry for Interstate, assuming NO commercial substance.

3) Queen Corp. traded an old machine with book value of $60,000 (cost $110,000) and a fair value of $100,000. Queen received a machine with a fair value of $80,000 plus cash of $20,000.

A) Prepare a journal entry for Queen, assuming commercial substance.

B) Prepare a journal entry for Queen, assuming NO commercial substance.