Wayne Co has a machine that costs $650,000 on October 31, 2011. This old machine had an estimated useful life of ten years and a salvage value of $50,000. On December 31, 2015 the old machine has a fair value of $450,000 and is exchanged for a new machine with a fair value of $446,000. The exchange lacks commercial substance. Wayne Co. also received $4,000 cash. Assume that the last fiscal period ended on Decmeber 31, 2015, and that straight-line deprecation is used.

Show the calculation of the amount of gain or loss to be recognized by Wayne Co. from the exchange.

Prepare all entries that are necessary on December 31, 2015 for Wayne Co.

can someone show the step by step process on how they reached the answer. So that I can use it as a study tool. Thanks