Question 12 4.48/7 View Policies Show Attempt History Current Attempt in Progress Your answer is partially correct. Waterway Company purchased an electric wax melter on April 30, 2020, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase. $19,276 List price of new melter Cash paid 12,200 Cost of old melter (5-year life, $854 salvage value) 13.664 Accumulated Depreciation-old melter (straight-line) 7,686 Secondhand fair value of old melter 6,344 Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial December 31, 2019. (Credit account titles are ubstance. Waterway's fiscal year ends on December 31, and depreciation has been recorded automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) No. Account Titles and Explanation Debit Credit (a) Exchange has commercial substance: Depreciation Expense 854 Accumulated Depreciation-Equipment 854 (To record current depreciation.) Accumulated Depreciation-Equipment 8540 Equipment 18544 Gain on Disposal of Equipment 1,220 12,200 Cash Equipment 13,664 (To record exchange of the equipment.) (b) Exchange lacks commercial substance: Depreciation Expense 854 Accumulated Depreciation-Equipment 854 (To record current depreciation.) (To record exchange of the equipment.)