On 1/1/21, Aleph Company exchanged equipment costing $220,000 with Bais Company. Alephs equipment had accumulated depreciation of $175,000 and FMV of $75,000 on the date of the exchange.

Aleph received from Bais equipment having a FMV of $61,500 plus cash to even out the exchange.

INSTRUCTIONS

A) Journalize the exchange on the books of Aleph assuming the exchange has commercial substance.

B) Journalize the exchange on the books of Aleph assuming the exchange lacks commercial substance.