The production manager of Monty Corporation wants to acquire a different brand of machine by exchanging the machine that it currently uses in operations for the brand of equipment that others in the industry are using. The brand being used by other companies is more comfortable for the operators because it has different attachments that allow the operators to adjust the controls for a variety of arm and hand positions. The production manager has received the following offers from other companies: 1. 2. 3. 4. Secord Corp. offered to give Monty a similar machine plus $22,310 in exchange for Monty's machine. Bateman Corp. offered a straight exchange for a similar machine with essentially the same value in use. Shripad Corp. offered to exchange a similar machine with the same value in use, but wanted $7,760 cash in addition to Monty's machine. Assume that the exchange is nonmonetary and lacks commercial substance. The production manager has also contacted Ansong Corporation, a dealer in machines. To obtain a new machine from Ansong, Monty would have to pay $90,210 and also trade in its old machine. Monty's equipment has a cost of $155,200, a net book value of $106,700, and a fair value of $89,240. The following table shows the information needed to record the machine exchange between the companies: Secord Bateman Shripad Machine cost $116,400 Ansong $142,590 $155,200 $126,100 Accumulated depreciation-machinery 43,650 68,870 72,750 -0- Fair value 66,930 89,240 97,000 179,450 For each of the four independent situations, assume that Monty accepts the offer. Prepare the journal entries to record the exchange on the books of each company. Assume that transactions 2 and 3 lack commercial substance for Bateman Company and Shripad Company respectively. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Transaction 1: Monty Corporation Account Titles and Explanation Debit Credit Secord Company Account Titles and Explanation Debit Credit Transaction 2: Monty Corporation Account Titles and Explanation Debit Credit Bateman Company Account Titles and Explanation Debit Credit Transaction 3: Monty Corporation Account Titles and Explanation Debit Credit Shripad Company Account Titles and Explanation Debit Credit Transaction 4: Monty Corporation Account Titles and Explanation Debit Credit Ansong Corporation Account Titles and Explanation Debit Credit (To record sale with trade-in) (To record cost of goods sold.) There will be scenarios or situations where different entries would be appropriate. Prepare the journal entries for transactions 2 and 3 assuming that they have commercial substance for Bateman Company and Shripad Company respectively. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Transaction 2: Monty Corporation Account Titles and Explanation Debit Credit Bateman Company Account Titles and Explanation Debit Credit Transaction 3: Monty Corporation Account Titles and Explanation Debit Credit Shripad Company Account Titles and Explanation Debit Credit List of Accounts Accounts Payable Accounts Receivable Accumulated Depreciation - Buildings Accumulated Depreciation - Equipment Accumulated Depreciation-Leasehold Improvements Accumulated Depreciation - Machinery Accumulated Depreciation - Vehicles Advertising Expense Asset Retirement Obligation Buildings Cashi Common Shares Contributed Surplus Contributed Surplus- Donated Capital Cost of Goods Sold Deferred Revenue - Government Grants Depreciation Expense Donation Revenue Equipment Finance Expense Finance Revenue Gain or Loss in Value of Investment Property Gain on Disposal of Building Gain on Disposal of Equipment Gain on Disposal of Machinery Gain on Disposal of Vehicles GST Payable GST Receivable Interest Expense Assistance Used Interest Income Interest Payable Interest Receivable Inventory Investment Property Land Land Improvements Loss on Disposal of Building Loss on Disposal of Equipment Loss on Disposal of Land Loss on Disposal of Machinery Loss on Disposal of Vehicles Machinery Repairs and Maintenance Expense Mineral Resources Mortgage Payable No Entry Notes Payable Notes Receivable Office Expense Owner's Drawings Prepaid Expenses Prepaid Insurance Profit on Construction Purchase Discounts Purchase Returns and Allowances Rent Expense Revaluation Gain or Loss Revaluation Surplus (OCI) Revenue-Government Grants Salaries and Wages Expense Salaries and Wages Payable Sales Revenue Service Revenue Supplies Supplies Expense Tenant Deposits Liability Vehicles