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Machinery costing $575,000 and has accumulated depreciation of $450,000 is exchanged for equipment with a fair value of $240,000 and $60,000 cash is received. The

Machinery costing $575,000 and has accumulated depreciation of $450,000 is exchanged for equipment with a fair value of $240,000 and $60,000 cash is received. The exchange lacked commercial substance.

1. What is the gain to be recognized from this sale?

2.What is the journal entry for the exchange?

Show a check of the amount recorded for the new equipment.

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