Problem 5: Other Topics 2

On October 15, 2000, Stay Indoors Corp traded a piece of equipment for a slightly different, but materially similar piece of equipment from Go Outside Inc. Stay Indoors' equipment had a historical cost of $85,000 and accumulated depreciation of $40,000. Go Outside's equipment was on Go Outside's books with a historical cost of $90,000 and accumulated depreciation of $35,000.

5.1: An independent assessment of Go Outside's equipment determined that the fair market value of the equipment was $40,000. Record the journal entry for this transaction on Stay Indoors' books.

5.2: Ignore 5.1. An independent assessment of Go Outside's equipment determined that the fair market value of the equipment was $51,000. Record the journal entry for this transaction on Stay Indoors' books.