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

1.		Stellar Company offered to exchange a similar machine plus $23,460. (The exchange has commercial substance for both parties.)
2.		Pearl Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.)
3.		Martinez Company offered to exchange a similar machine, but wanted $3,060 in addition to Pronghorns machine. (The exchange has commercial substance for both parties.)

In addition, Pronghorn contacted Sandhill Corporation, a dealer in machines. To obtain a new machine, Pronghorn must pay $94,860 in addition to trading in its old machine.

		Pronghorn		Stellar		Pearl		Martinez		Sandhill
Machine cost		$163,200		$122,400		$155,040		$163,200		$132,600
Accumulated depreciation		61,200		45,900		72,420		76,500		0
Fair value		93,840		70,380		93,840		96,900		188,700

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

Send to Gradebook Prev Question 5 1.8/2 View Policies Show Attempt History Current Attempt in Progress Your answer is partially correct. Pronghorn Corporation wishes to exchange a machine used in its operations. Pronghorn has received the following offers from other companies in the industry Stellar Company offered to exchange a similar machine plus $23,460. (The exchange has commercial substance for both parties.) 1. Pearl Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.) 2. Martinez Company offered to exchange a similar machine, but wanted $3,060 in addition to Pronghorn's machine. (The exchange has commercial substance for both parties.) 3. In addition, Pronghorn contacted Sandhill Corporation, a dealer in machines. To obtain a new machine, Pronghorn must pay $94,860 in addition to trading in its old machine. Pronghorn Stellar Pearl Martinez Sandhill $163,200 $122,400 $155,040 $163,200 $132,600 Machine cost Accumulated depreciation 61,200 45,900 72,420 76,500 -0- 93,840 Fair value 93,840 70,380 96,900 188,700 Il 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 O for the amounts.) Debit Credit No. Account Titles and Explanation 1. Pronghorn Corporation Cash 23460 Machinery 70380 Accumulated Depreciation Machinery 61200 Loss on Disposal of Machinery 8160 Machinery 163200 Stellar Company 93840 Accumulated Depreciation Machinery 45900 Loss on Disposal of Machinery 6120 Cash 23460 Machinery 122400 2. Pronghorn Corporation Machinery 93840 Accumulated Depreciation-Machinery 61200 Loss on Disposal of Machinery 8160 Machinery 163200 Pearl Company Machinery 82620 Accumulated Depreciation-Machinery 72420 Machinery 155040 3. Pronghorn Corporation Machinery 96900 Accumulated Depreciation-Machinery 61200 Loss on Disposal of Machinery 8160 Machinery 163200 Cash 3060 Martinez Company Machinery 93840 Accumulated Depreciation-Machinery 76500 Cash 3060 Machinery 163200 Gain on Disposal of Machinery 10200 4. Pronghorn Corporation Machinery 188700 Accumulated Depreciation-Machinery 61200 Loss on Disposal of Machinery 0 Machinery 163200 Cash 86700 Sandhill Company Cash 86700 Inventory 93840 Cost of Goods Sold 132600 (To record exchange of inventory) Sales Revenue 188700 Inventory 124440 (To record cost of inventory) e Textbook and Media List of Accounts Attempts: 8 of 15 used Save for Later Submit Answer Send to Gradebook