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Metro Inc. trades its used machine for a new model at Denver Co. The used machine has a book value of $42,000 (cost $64,000) and

Metro Inc. trades its used machine for a new model at Denver Co. The used machine has a book value of $42,000 (cost $64,000) and a fair value of $50,000. Metro receives $5,000 cash from Denver.

A) Prepare the necessary journal entry by Metro to record this exchange. Assume the exchange has no commercial substance.

B) Prepare the necessary journal entry by Metro to record this exchange. Assume the exchange has commercial substance.

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