Titleist Inc. exchanges its used golf club casting equipment with Callaway Inc. in exchange for a newer piece of casting machinery. The book value of Titleists used machine is $75,000 (original cost of $100,000 and accumulated depreciation of 25,000). Titleist also receives $40,000 cash from Callaway. This exchange is deemed to lack commercial substance. Make the appropriate journal entries

(2a) If the fair market value of Titleists machine is $60,000, how would Titleist account for this transaction?

(2b) If the fair market value of Titleists machine is $80,000, how would Titleist account for this transaction? Is there a partial gain? Please show how you got your answer?