Problem 10-8

Vaughn Corporation wishes to exchange a machine used in its operations. Vaughn has received the following offers from other companies in the industry.

1.		Bramble Company offered to exchange a similar machine plus $25,300. (The exchange has commercial substance for both parties.)
2.		Sunland Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.)
3.		Coronado Company offered to exchange a similar machine, but wanted $3,300 in addition to Vaughns machine. (The exchange has commercial substance for both parties.)

In addition, Vaughn contacted Whispering Corporation, a dealer in machines. To obtain a new machine, Vaughn must pay $102,300 in addition to trading in its old machine.

	Vaughn	Bramble	Sunland	Coronado	Whispering
Machine Cost	$176,000	$132,000	$167,200	$176,000	$143,000
Accumulated depreciation	66,000	49,500	78,100	82,500	-0-
Fair value	101,200	75,900	101,200	104,500	203,500

For each of the four independent situations, prepare the journal entries to record the exchange on the books of each company. (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.)

No.	Account Titles and Explanation	Debit	Credt
1	Vaughn Corporation
	Bramble Company
2.	Vaughn Corporation
	Sunland Company
3.	Vaughn Company
	Coronado Company
4.	Vaughn Corporation
	Whispering Company
	(to record exchange of inventory)
	(to record cost of inventory)

List of Accounts

Accounts Payable Accumulated Depreciation-Building Accumulated Depreciation-Equipment Accumulated Depreciation-Machinery Accumulated Depreciation-Trucks Buildings Cash Common Stock Contribution Revenue Cost of Goods Sold Depreciation Expense Direct Labor Discount on Notes Payable Equipment Factory Overhead Gain on Disposal of Buildings Gain on Disposal of Equipment Gain on Disposal of Machinery Gain on Disposal of Trucks Insurance Expense Interest Expense Inventory Land Land Improvements Loss on Disposal of Buildings Loss on Disposal of Equipment Loss on Disposal of Machinery Loss on Disposal of Trucks Machinery Maintenance and Repairs Expense Materials No Entry Notes Payable Organization Expense Paid-in Capital in Excess of Par - Common Stock Prepaid Insurance Retained Earnings Salaries and Wages Expense Sales Revenue Trading Securities Trucks