Jones Corp. purchased equipment for $45,000. Total depreciation of $36,000 was recorded. On January 1, 2017, Jones exchanged the equipment for new equipment, paying $56,000 cash. The market value of the new equipment is $65,000. Prepare the journal entry to record this transaction. Assume the exchange has commercial substance.

Equipment (new) xx

Accumulated DepreciationEquipment xx

Equipment (old) xx

Cash xx

Explanation: Calculation of gain or loss on exchange:

Market value of assets received xx

Less:

Book value of asset exchanged xx

Cash paid xx (xx)

Gain or (Loss) $xx