Problem

On August 1, Arna, Inc. exchanged productive assets with Bontemps,Inc. Arna's asset is referred to below as "Asset A," and Bontemps' is referred to as "Asset B." The fol-lowing facts pertain to these assets

                                                                         Asset A                     Asset B
Original cost                                                        $96,000                    $110,000
Accumulated depreciation (to date of exchange)      45,000                      52,000
Fair market value at date of exchange                    60,000                      75,000
Cash paid by Arna, Inc                                         15,000
Cash received by Bontemps, Inc.                                                           15,000

a) Assuming that the exchange of Assets A and B has commercial substance, record the exchange for both Arna, Inc. and Bontemps, Inc. in accordance with generally accepted accounting principles.

b) Assuming that the exchange of Assets A and B lacks commercial substance, record the exchange for both Arna, Inc. and Bontemps, Inc. in accordance with generally accepted accounting principles.