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

List price of new freezer $23,240

Cash paid 15,456

Cost of old machine (4-year life, $1,680 salvage value) 19,600

Accumulated depreciationold machine (straight-line) 8,960

Secondhand fair value of old machine 7,504

Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. Splish Brotherss fiscal year ends on December 31, and Splish Brothers recorded depreciation on the old machine through September 30, 2017.