Vaughn Company purchased an electric wax melter on April 30, 2025, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase. List price of new melter Cash paid Cost of old melter (5-year life, $800 salvage value) $20,500 13,000 14,600 Accumulated depreciation-old melter (straight-line) 8,200 Secondhand fair value of old melter 6,800 Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. Vaughn's fiscal year ends on December 31, and depreciation has been recorded through December 31, 2024. (Credit account titles are automatically indented when 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. List all debit entries before credit entries.) No. Account Titles and Explanation (a) Exchange has commercial substance: Depreciation Expense Accumulated Depreciation-Machinery Debit 800 Credit 800 (To record exchange of the equipment.) (b) Exchange lacks commercial substance: (To record current depreciation.) (To record exchange of the equipment.)