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Red Company and Green, Inc., are candy manufacturers. The two companies agree to exchange pieces of equipment, with Red Company exchanging its equipment plus $30,000 for Green, Inc.'s equipment. The transaction lacks commercial substance. On the date of the exchange, the companies' records showed the following information:

		Red Company	Green, Inc.
	Historical cost	$280,000	$300,000
	Accumulated depreciation	(150,000)	(160,000)
	Fair value	250,000	275,000

To prepare each required journal entry:

• Click on a cell in the Account Name column and select from the option list the appropriate account. An account may be used once, more than once, or not at all.
• Enter the corresponding debit or credit amount in the associated column.
• Round all amounts to the nearest whole number.
• Not all rows in the table might be needed to complete each journal entry.
• If no journal entry is needed, check the No entry required box at the top of the table as your response.

1. Prepare the journal entries Red Company must record to account for the exchange of equipment.

No Entry Required

Account Name	Debit	Credit
Equipment received
Accumulated depreciation on equipment given up
Cash
Equipment given up

2. Prepare the journal entries Green, Inc., must record to account for the exchange of equipment.

No Entry Required

Account Name	Debit	Credit
Cash
Equipment received
Accumulated depreciation on equipment given up
Equipment given up
Gain on exchange