Sweet Corporation exchanged equipment used in its manufacturing operations for equipment used in the operations of Pharoah Ltd. The following information pertains to the exchange:

		Sweet Corp.			Pharoah Ltd.
Equipment (cost)		$84,400			$84,400
Accumulated depreciation		46,100			41,000
Fair value of old equipment		42,500			43,000
Cash given up		500

Both companies agreed that the exchange did not have commercial substance. Prepare the necessary journal entries to record the asset exchange on the books of both companies.