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Sony Corporation management decides to discontinue its PlayStation (PS) product line and focus on its. Home Theater line of products. It contracts with Microsoft, whose
Sony Corporation management decides to discontinue its PlayStation (PS) product line and focus on its. Home Theater line of products. It contracts with Microsoft, whose management is focusing more on gaming and less on smart entertainment products. They agree to exchange a key piece of equipment each - Sony gives up a piece of production equipment for the PS and Microsoft gives up a piece of equipment that will help Sony make better Home Theater hardware. The exchange helps each company to meet its goals more productively. The equipment Sony acquires has a fair value of $8 million. The equipment it gives up has a fair value of $7.2 million, and Sony agrees to pay Microsoft $0.8 million in cash on the exchange date. Sony had originally acquired its PS equipment for $15 million and management had depreciated $10 million of it by 11/1/2022, the exchange date. Make the entry for Sony for this exchange transaction
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