Textile manufacturer Pharoah Corp. exchanges robotic equipment with an original cost of $22,500 and a carrying amount of $11,950 with the equipment rental company Flounder Corp. The equipment that is received in exchange from Flounder Corp. has an original cost of $39,300 and a carrying amount of $15,900, performs different functions, and has a fair value of $21,300. The individual shareholder owned only 40% of the shares of each company. Because they are closely held companies, they both follow ASPE. Assume that there is independent evidence to support the value of the computer software. Prepare the journal entries for both companies to record the exchange. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Pharoah Corp.

Account Titles and Explanation	Debit	Credit
select an account title Gain on Disposal of EquipmentContributed CapitalEquipment (new)Loss on Disposal of EquipmentRetained EarningsAccumulated DepreciationEquipmentCashEquipment (old)	enter a debit amount	enter a credit amount
select an account title Retained EarningsContributed CapitalGain on Disposal of EquipmentEquipment (old)Accumulated DepreciationEquipmentEquipment (new)Loss on Disposal of EquipmentCash	enter a debit amount	enter a credit amount
select an account title CashAccumulated DepreciationEquipmentEquipment (new)Contributed CapitalRetained EarningsLoss on Disposal of EquipmentGain on Disposal of EquipmentEquipment (old)	enter a debit amount	enter a credit amount
select an account title Contributed CapitalRetained EarningsLoss on Disposal of EquipmentEquipment (new)Equipment (old)Accumulated DepreciationEquipmentGain on Disposal of EquipmentCash	enter a debit amount	enter a credit amount

Flounder Corp.

Account Titles and Explanation	Debit	Credit
select an account title Gain on Disposal of EquipmentAccumulated DepreciationEquipmentEquipment (old)Contributed CapitalCashRetained EarningsEquipment (new)Loss on Disposal of Equipment	enter a debit amount	enter a credit amount
select an account title Equipment (old)Loss on Disposal of EquipmentContributed CapitalCashAccumulated DepreciationEquipmentRetained EarningsEquipment (new)Gain on Disposal of Equipment	enter a debit amount	enter a credit amount
select an account title Gain on Disposal of EquipmentCashEquipment (old)Equipment (new)Loss on Disposal of EquipmentAccumulated DepreciationEquipmentContributed CapitalRetained Earnings	enter a debit amount	enter a credit amount
select an account title CashGain on Disposal of EquipmentRetained EarningsLoss on Disposal of EquipmentEquipment (old)Equipment (new)Accumulated DepreciationEquipmentContributed Capital	enter a debit amount	enter a credit amount