QUESTION TWO

Holyfield Corporation wishes to exchange a machine used in its operations. Holyfield has received the following offers from other companies in the industry.

$1.$ Dorsett Company offered to exchange a similar machine plus $23,000.$

$2.$ Winston Company offered to exchange a similar machine.

$3.$ Liston Company offered to exchange a similar machine but wanted $3,000$ in addition to Holyfield's machine.

$4.$ In addition, Holyfield contacted Greeley Corporation, a dealer in machines. To obtain a new machine, Holyfield must pay $93,000$ in addition to trading in its old machine.

Holyfield

Dorsett

Winston

Liston

Greeley

Machine cost $160,000$

$120,000152,000160,000$

$130,000$

Accumulated depreciation

$60,00045,00071,00075,000$

$-0-$

Fair value

$92,000$

$69,000$

$92,000$

$95,000$

$185,000$

Instructions

For each of the four independent situations, prepare the journal entries to record the exchange on the books of each company. Except in number $2$ above assume all other transactions have a commercial substance.