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How to prepare the journal entries to record the exchange

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Reference no: EM132572507

Santana Company exchanged equipment used in its manufacturing operations plus $2,000 in cash for similar equipment used in the operations of Delaware Company. The following information pertains to the exchange.

Santana Co. Delaware Co. Equipment (cost) $28,000 $18,000
Accumulated depreciation 9,000 10,000
Fair value of equipment 14,000 16,000
Cash given up 2,000

Instructions:

Question 1: Prepare the journal entries to record the exchange on the book of Santana Co. and Delaware Co. Assume that the exchange lacks commercial substance.

Reference no: EM132572507

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