On June 30, 2020, the Simpson Corporation purchased a piece of equipment from the Krusty Manufacturing Company. Krusty is allowing Simpson to pay $130,000 on June 30, 2020. Simpson accepted these terms. The crane could have been purchased for a cash price of $110,000.

Required

a) Assuming that Krusty is a publicly accountable entity, write the journal entries for the sale of the crane at June 30, 2020 and at Krustys year-ends of December 31, 2020 and December 31, 2021. (4 marks)

b) Repeat part (a) on the assumption that Krusty is a private company subject to ASPE. (2 marks)