Waterway Company exchanged machinery with an appraised value of $3,476,000, a recorded cost of $5,314,000 and accumulated depreciation of $2,657,000 with Lisa Corporation for machinery Lisa owns. The machinery has an appraised value of $3,401,000, a recorded cost of $6,460,000, and accumulated depreciation of $3,553,000. Lisa also gave Waterway $75,000 in the exchange. Assume depreciation has already been updated.

(a)

Prepare the entries on both companies' books assuming that the exchange had commercial substance. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Waterway

Account Titles and Explanation	Debit	Credit

Lisa

Account Titles and Explanation	Debit	Credit

Prepare the entries on both companies' books assuming that the exchange lacked commercial substance. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round intermediate calculations to 5 decimal places and final answers to 0 decimal places, e.g. 12,515.) Waterway

Account Titles and Explanation	Debit	Credit

Lisa

Account Titles and Explanation	Debit	Credit