QUESTION #$3(12$ Marks, $24$ minutes$)$

XYZ Incorporated exchanges Equipment $($A$)$ for Equipment $($B$)$ with ABC Incorporated.

Original Cost Accumulated Amortization

Equipment A $$20,000$$$8,000$

Equipment B $$17,000$$$7,000$

Provide journal entries for the following unrelated examples:

No cash was involved in the transaction. Both companies thought the trade was fair but the equipment was unique and it was impossible to obtain an estimate of fair value.

In addition to the machinery, XYZ Incorporated provides ABC Incorporated with $$400$ cash.

No cash was involved in the transaction. Both companies thought the trade was fair. The fair value of Equipment A was estimated at $$19,600$ and the fair value of Equipment B was estimated at $$20,000.$ Both estimates

were equally valid and the machines are used for different purposes.

Required:

For the following separate examples provide the appropriate journal entries for both XYZ Incorporated and ABC Incorporated.