Question
Windy and Krook Company enter into an agreement for the trade of certain nonmonetary assets. The machines exchanged by Windy Company have a book value
Windy and Krook Company enter into an agreement for the trade of certain nonmonetary assets. The machines exchanged by Windy Company have a book value of $245000 (cost $325000 less accumulated depreciation of $80000) and a fair value of $275000. The trucks given up by Krook Company have a book value of $260000 (cost $350000 less accumulated depreciation $90000) and a fair value of $290000. In addition to the exchange of the assets, Windy agrees to pay Krook Company $15000 as part of the transaction. Assume that the exchange lacks commercial substance.
Instructions: Record the exchange transactions for Windy Company and Krook Company.
For Windy:
Date Account Titles Debit Credit
Step 1: Assets given up: ? Assets Received: ? Step 2: Gain/loss of: ?
BV of: ?
FV of: ?
For Krook:
Date: Account Titles: Debit: Credit:
Step 1: Assets given up: ? Assets Received: ? Step 2: Gain/loss of: ?
BV of: ?
FV of: ?
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