Non-Monetary Exchange (8 marks)

Apple Inc. exchanged a large piece of equipment (fair value of $1,500,000; original cost of $2,000,000; accumulated depreciation of $850,000) for equipment that belonged to Orange Ltd. The equipment from Orange has a fair value of $1,600,000, original cost of $3,000,000, and accumulated depreciation of $1,750,000. All amounts have been updated to the date of the exchange. In addition to the equipment, Orange paid Apple $50,000 as part of the exchange.

Required

Prepare the journal entry for Apple Inc., assuming that the exchange lacks commercial substance.