Teal Mountain Inc. purchased a commercial grade soft-serve ice cream machine on September 30, 2017. Teal Mountain traded in its existing machine and paid cash in the transaction. The details of the transaction are as follows: Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. Teal Mountain's fiscal year ends on December 31, and Teal Mountain recorded depreciation on the old machine through September 30, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) Exchange has commercial substance: Depreciation Expense 2760 Accumlated Depreciation-Equipment \begin{tabular}{r} \hline 2760 \\ \hline \\ \hline \end{tabular} 2760 (To record current depreciation) Equipment 18860 Accumulated Depreciation-Equipment 10120 Cash 12696 Equipment 16100 Gain on Disposal of Plant Assets 184 (To record exchange of the machine) (b) Exchange lacks commercial substance: Depreciation Expense 2760 Accumlated Depreciation-Equipment 2760 (To record current depreciation) Accumulated Depreciation-Equipment Equipment Cash Machinery (To record exchange of the machine) 18676 10120 12696 16100 \begin{tabular}{r|} \hline \\ \hline \\ \\ \\ \hline 12696 \\ \hline \\ \hline \end{tabular}