(Answered) This is a monetary exchange with a gain or lossa machine

Accounting

*This is a monetary exchange with a gain or loss

A machine cost $40,000 has annual amortization expense of $8,000 and has accumulated amortization of $20,000 on December 31 2006. On April 1 2007 when the machine has a fair value of $16,000 it is exchanged for a similar machine with a fair value of $44,000 and $28,000 cash is paid.

Instructions

Prepare all entries that are necessary at April 1 2007.

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