Question
Metlock Company exchanged equipment used in its manufacturing operations plus $3,600 in cash for similar equipment used in the operations of Bonita Company. The following
Metlock Company exchanged equipment used in its manufacturing operations plus $3,600 in cash for similar equipment used in the operations of Bonita Company. The following information pertains to the exchange.
| Metlock Co. | Bonita Co. | |||||
|---|---|---|---|---|---|---|
| Equipment (cost) | $33,600 | $33,600 | ||||
| Accumulated depreciation | 22,800 | 12,000 | ||||
| Fair value of equipment | 15,000 | 18,600 | ||||
| Cash given up | 3,600 | |||||
Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange has commercial substance. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange has commercial substance.
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