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Question - Concord Company exchanged equipment used in its manufacturing operations plus $3,060 in cash for similar equipment used in the operations of Marigold Company. The following information pertains to the exchange.

 

Concord Co.

Marigold Co.

Equipment (cost)

$28,560

$28,560

Accumulated depreciation

19,380

10,200

Fair value of equipment

12,750

15,810

Cash given up

3,060

 

Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance.

Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange has commercial substance.

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  • Category:- Accounting Basics
  • Reference No.:- M92510407
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