Mercurial Company traded its cutting equipment for the newer air-cooled equipment manufactured by Broad Street Corporation. The air-cooled equipment will increase Mercurial's productivity.

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Requirement Prepare the journal entry to record the exchange on the books of the Mercurial Company. (Record debits first, then credits. Exclude explanations from any journal entries.)

Account	Current Year

The old equipment had a book value of$140,000 (cost of $700,000 less accumulated depreciation of $560,000). Assume that the accumulated depreciation is brought up to the date of the exchange. The old equipment was recently appraised at fair value of $210,000. Mercurial paid Broad Street $602,000 in cash. The new air-cooled equipment had a fair value of $812,000.