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Metro Industries trades its used machine for a new model at Denver Inc. The used machine has a book value of $8,000 (cost $12,000) and

Metro Industries trades its used machine for a new model at Denver Inc. The used machine has a book value of $8,000 (cost $12,000) and a fair value of $13,000. The new model has a fair value of $16,000 and Denver gives Metro a trade-in allowance of $15,000 for the used machine. Assume the exchange has No commercial substance.

A) How much does Metro have to pay to or receive from Denver? Explain? .

B) Prepare Metro's journal entry to record this exchange.

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