Sage Hill Inc. purchased a commercial grade soft-serve ice cream machine on September 30, 2017. Sage Hill traded in its existing machine and paid cash in the transaction. The details of the transaction are as follows:

		List price of new freezer		$21,995
		Cash paid		14,628
		Cost of old machine (4-year life, $1,590 salvage value)		18,550
		Accumulated depreciationold machine (straight-line)		8,480
		Secondhand fair value of old machine		7,102

Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. Sage Hills fiscal year ends on December 31, and Sage Hill recorded depreciation on the old machine through September 30, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.	Account Titles and Explanation	Debit	Credit
(a)	Exchange has commercial substance:
	enter an account title To record current depreciation	enter a debit amount	enter a credit amount
	enter an account title To record current depreciation	enter a debit amount	enter a credit amount
	(To record current depreciation)
	enter an account title To record exchange of the machine	enter a debit amount	enter a credit amount
	enter an account title To record exchange of the machine	enter a debit amount	enter a credit amount
	enter an account title To record exchange of the machine	enter a debit amount	enter a credit amount
	enter an account title To record exchange of the machine	enter a debit amount	enter a credit amount
	enter an account title To record exchange of the machine	enter a debit amount	enter a credit amount
	(To record exchange of the machine)
(b)	Exchange lacks commercial substance:
	enter an account title To record current depreciation	enter a debit amount	enter a credit amount
	enter an account title To record current depreciation	enter a debit amount	enter a credit amount
	(To record current depreciation)
	enter an account title To record exchange of the machine	enter a debit amount	enter a credit amount
	enter an account title To record exchange of the machine	enter a debit amount	enter a credit amount
	enter an account title To record exchange of the machine	enter a debit amount	enter a credit amount
	enter an account title To record exchange of the machine	enter a debit amount	enter a credit amount
	enter an account title To record exchange of the machine	enter a debit amount	enter a credit amount
	(To record exchange of the machine)