Pronghorn Ltd. wished to purchase some new equipment for its factory. However, due to recent cash flow difficulties, Pronghorn did not have enough cash on hand to complete the transaction. The equipment's vendor agreed to accept 1,240 common shares in Pronghorn in exchange for the equipment. Pronghorn's shares were actively trading at $13.82/share on the day of the exchange.

Required

a. Prepare the journal entry to record the purchase of the equipment on Pronghorn's books, assuming that the list price for the equipment was $15,500.

b. Prepare the journal entry assuming Pronghorn was a private company whose shares do not trade actively and that the equipment had a quoted fair value of $18,277.