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Problem 3 Jackson Company exchanged land and cash of $7,500 for equipment. The land had a book value of $75,000 and a fair value of

Problem 3

Jackson Company exchanged land and cash of $7,500 for equipment. The land had a book value of $75,000 and a fair value of $105,000.

Required:

(a) Prepare the journal entry to record the exchange, assuming this transaction has commercial

substance.

(b) Prepare the journal entry to record the exchange, assuming this transaction lacks commercial

substance.

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