Kingbird Inc. purchased a commercial grade soft-serve ice cream machine on September 30, 2017. Kingbird traded in its existing machine and paid cash in the transaction. The details of the transaction are as follows:

		List price of new freezer		$24,900
		Cash paid		16,560
		Cost of old machine (4-year life, $1,800 salvage value)		21,000
		Accumulated depreciationold machine (straight-line)		9,600
		Secondhand fair value of old machine		8,040

Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. Kingbirds fiscal year ends on December 31, and Kingbird recorded depreciation on the old machine through September 30, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.	Account Titles and Explanation	Debit	Credit
(a)	Exchange has commercial substance:
	enter an account title To record current depreciation	enter a debit amount	enter a credit amount
	enter an account title To record current depreciation	enter a debit amount	enter a credit amount
	(To record current depreciation)
	enter an account title To record exchange of the machine	enter a debit amount	enter a credit amount
	enter an account title To record exchange of the machine	enter a debit amount	enter a credit amount
	enter an account title To record exchange of the machine	enter a debit amount	enter a credit amount
	enter an account title To record exchange of the machine	enter a debit amount	enter a credit amount
	enter an account title To record exchange of the machine	enter a debit amount	enter a credit amount
	(To record exchange of the machine)
(b)	Exchange lacks commercial substance:
	enter an account title To record current depreciation	enter a debit amount	enter a credit amount
	enter an account title To record current depreciation	enter a debit amount	enter a credit amount
	(To record current depreciation)
	enter an account title To record exchange of the machine	enter a debit amount	enter a credit amount
	enter an account title To record exchange of the machine	enter a debit amount	enter a credit amount
	enter an account title To record exchange of the machine	enter a debit amount	enter a credit amount
	enter an account title To record exchange of the machine	enter a debit amount	enter a credit amount
	enter an account title To record exchange of the machine	enter a debit amount	enter a credit amount
	(To record exchange of the machine)