. On August 1, Golden Company exchanged a machine for a similar machine owned by Colt Company and also received $7,000 cash from Colt Company. Golden's machine had an original cost of $80,000, accumulated depreciation to date of $14,500, and a fair market value of $60,000. Colts machine had an original cost of $95,000 and a book value of $45,000 and a fair value of $53,000.

Required:

1) Prepare the necessary journal entry by Golden Company to record this transaction, assuming the exchange has

A) Commercial Substance

B) No Commercial Substance

2) Prepare the necessary journal entry by Colt Company to record this transaction, assuming the exchange has

A) Commercial Substance

B) No Commercial Substance