Question 1

China Inn and Midwest Chicken exchanged assets. China Inn received delivery equipment and gave restaurant equipment. The fair value and book value of the restaurant equipment were $14,500 and $10,000 (original cost of $30,000 less accumulated depreciation of $20,000), respectively. To equalize market values of the exchanged assets, China Inn paid $7,100 in cash to Midwest Chicken.

Record the gain or loss for China Inn on the exchange of the equipment. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Record the gain or loss for China Inn on the exchange of the equipment.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
1