On August 1, Pharoah, Inc. exchanged productive assets with Novak, Inc. Pharoahs asset is referred to below as Asset A, and Novak is referred to as Asset B. The following facts pertain to these assets.

asset A

Asset B

Original cost

$103,680

$118,800

Accumulated depreciation (to date of exchange)

43,200

50,760

Fair value at date of exchange

64,800

81,000

Cash paid by Pharoah, Inc.

16,200

Cash received by Novak, Inc.

16,200

A. Assuming that the exchange of Assets A and B has commercial substance, record the exchange for both Pharoah, Inc. and Novak, Inc. in accordance with generally accepted accounting principles. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) b. Assuming that the exchange of Assets A and B lacks commercial substance, record the exchange for both Pharoah, Inc. and Novak, Inc. in accordance with generally accepted accounting principles. (Round intermediate calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places e.g. 58,971. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)