Exchanged equipment costing

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Reference no: EM13747356

The Corey Company exchanged equipment costing $190,000 with accumulated depreciation of $45,000 for equipment owned by Salvo Corporation. The Salvo equipment cost $305,000 with accumulated depreciation of $105,000. The fair value of both pieces of equipment was $275,000.

Provide the necessary entries to record the transaction on both companies' books assuming:

(1) The exchange lacks commercial substance.

(2) The exchange has commercial substance.

Reference no: EM13747356

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