Qec Inc. bought machinery worth $120,000 on January 1st, 2014.With no residual value, itestimated a useful life of 10 years. It is now January 1s,2021, and the company decided to switch to the double-declining-balance method for this machinery.Also, the company discoveredthat the original cost of the equipment incorrectly included a cleaning charge for the machinery,amounting to $10,000. Required: a. Prepare the appropriate correcting entry for the machinery capitalization error discovered in year 2021 b. Prepare the journal entry to the change in depreciation methods for the year 2021, recorded on December 31st, 2021. c. In the year 2021, Lockin Inc. exchanged machinery used in its business for machinery used in the business of Qec Inc. The following information pertains to the exchange:

Prepare the journal entries to record the exchange on the books of both companies if: i.The exchange has commercial substance ii.The exchange lacks commercial substance

Lockin Inc. Qec Inc. Machinery $100,000 $110,000 Accumulated Depreciation 93,000 99,000 Fair Value of Equipment 8,000 14,000 Cash Given Up 2,000